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Sales tax revenues show recovery signs

Heather McGregor
Managing Editor

The Glenwood Springs post-fire economy is on the mend, and the numbers prove it.

July 2002 sales and accommodations tax revenues were down compared to July 2001, but made a marked rebound over June 2002.

June 2002 sales taxes were down 9.7 percent compared to June 2001, and accommodations taxes were down by 13.8 percent for the same period.

Newly released numbers show that July 2002 sales taxes were down by 4.6 percent compared to July 2001, and accommodations taxes were down by 5.8 percent for the same period.

“The fire took us out pretty good, and we still have some lingering effects,” said Glenwood Springs city manager Mike Copp, referring to the June 8 Coal Seam Fire.

“At least it’s on an upward trend,” said Marianne Virgili, director of the Glenwood Springs Chamber Resort Association.

July’s numbers look far better than June’s, and the two are hoping that August commerce came even closer to matching the record-high levels seen in 2001.

“I know the beginning of August was really strong, but we don’t know yet what happened when kids returned to school. I think we had a good Labor Day weekend, and we expect the fall to be good,” Virgili said, noting that it’s a popular time for retirees to travel.

“If sales taxes are down, people are not having the kind of year they’d like to have,” Copp said. “We are hoping that our businesses will survive and do better in the future. Hopefully things will turn around.”

The fire scorched the city’s lucrative summer economy, but sales and lodging were already down before June due to the lagging national economy and lingering effects of the Sept. 11 terrorist attacks.

Through May 2002, cumulative sales tax revenues for Glenwood Springs were down 0.2 percent compared to the first five months of 2001, due to less-than-stellar readings in January and March.

“If you look at every other mountain tourist community, they are getting hit pretty hard as well,” Copp said.

“As bad as the state is doing, these numbers aren’t that bad,” Virgili said after looking at the July figures. “We should be satisfied with these, and if Mother Nature cooperates, we will have a wonderful winter.”

Budgeting for 2003

Copp said the city budget, largely but not totally reliant on sales tax revenues, was planned conservatively for 2002, so the revenue losses won’t result in service cuts.

“Even though at end of June we were 2 percent down, we were still a few thousand dollars over what we budgeted,” he said.

And the city’s electric utility and landfill continue to make money, he noted, boosting the city’s financial health.

“Vail is looking to raise property taxes to offset its sales tax drop,” Copp said. “Fortunately we’re still in good shape, and we won’t have to do that. We budgeted conservatively.”

Now, city officials are beginning to draft the city’s budget for 2003. Copp said the budget will be planned based on sales tax revenues equal to those collected in 2001.

Some major construction projects will be put off, no new positions will be created, and top-level city employees will not get raises next year, he said.

The Glenwood Springs City Council will start a series of work sessions on the 2003 budget at 5:30 p.m. this Thursday in Council Chambers in the new City Hall, 101 W. 8th St. The work sessions are open to the public, and the council will hold a public hearing on next year’s budget once it is finalized.


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