Sales tax slump may have ended | PostIndependent.com

Sales tax slump may have ended

Lynn Burton
Post Independent Staff

Glenwood Springs sales tax collections are rebounding after a down year in 2002, but city officials say it’s too early to predict an economic turnaround.

“We hope the figures are a positive indication, but we need to get into the summer before we breathe a sigh of relief,” said Glenwood Springs Mayor Don Vanderhoof.

In 2002, sales tax collections were down 2.4 percent compared to 2001, said city finance director Mike Harman.

For January and February of 2003, the only months available so far, sales tax collections were up 2.9 percent compared to the first two months of 2002.

Harman agreed with Vanderhoof that it’s too early in the year to declare the downward sales tax trend is over.

“But it’s definitely a positive indication. The numbers look better this year than last year,” Harman said.

From 1993 through 2001, Glenwood Springs posted sales tax gains each year. The city posted sales tax gains from January through May 2002, but dipped through the rest of the year following the Coal Seam Fire.

Accommodations tax revenues were up 4.6 percent in January, but slid 9 percent in February, compared to January and February of 2002. Accommodation tax revenues fund Glenwood’s tourist advertising campaign.

For the first two months of 2003, Glenwood Springs sales tax collections, excluding the 2.5 percent accommodation tax on lodging facilities, totaled $1.4 million compared to $1.3 million in the first two months of 2002.

Glenwood Springs charges 3.45 percent sales tax, and breaks the collections down in the following categories: transportation and utilities, building materials and supplies, general merchandise stores, food stores, automotive and service stations, apparel accessories, furniture and home furnishings, eating and drinking establishments, motel and hotel, miscellaneous retail, and all other.

Miscellaneous retail increased the most with a 40 percent gain, followed by building materials and supplies with a 10.5 percent gain, and food stores with a 4.8 percent gain. The “all other” category fell the most at 13 percent, followed by a 7.8 percent decline in transportation and utilities. Furniture and home furnishings were off 4.5 percent.

Harman said it’s difficult to gauge whether Glenwood Springs is emerging from its sales tax doldrums, in part because it doesn’t always follow national economic trends.

For example, high gasoline prices might keep families from traveling to other states for summer vacations, which could hurt those destinations. High gas prices might actually help Glenwood by making Western Slope vacations economically attractive.

“So high gas prices, to some extent, could be a positive for Glenwood Springs,” Harman said.

Contact Lynn Burton: 945-8515, ext. 534

lburton@postindependent.com


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