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Sales tax slump no reason to hit panic button

With Monday’s passage of the 2003 Glenwood Springs city budget, city leaders wondered aloud about how far sales tax revenues would have to drop before cuts will have to be made.

So far, city sales tax revenues are down around 4 percent in 2002 compared to 2001. If that percentage holds until the end of 2002, it would mean a drop of $140,000 from 2001 sales tax revenues.

The 2003 budget was unanimously approved by City Council early Monday in a special meeting. But the city’s budget, which was based on record-high 2001 sales tax revenues, had some council members asking what would happen if revenues continue to drop.



“If taxes go way down, I don’t want staff to worry about cutting in 2003,” Councilman Don Gillespie said, indicating that the city could absorb a moderate decline without trimming jobs or services. “But cuts could be made in 2004,” he said.

Gillespie said cuts would likely only be made if the bottom falls out of the economy.



“It’s not time to push the panic button yet,” Gillespie said. “I don’t even think we should think about getting the word out that we’re going to cut services or jobs.”

Councilman Rick Davis agreed.

“I don’t want us to have some knee-jerk reaction,” he said.

Mayor Don Vanderhoof estimated the city could absorb a revenue shortfall of up to $350,000 by dipping into the city’s savings, before making any cuts,. Even if revenue declines exceeded that amount, lower-priority capital projects would be ditched first, leaving city jobs and services unscathed.

City manager Mike Copp said he and others on the city staff will keep a close eye on revenues during 2003.

“December is the biggest sales tax month. That would be a good indicator,” Copp said of the coming holiday season.

While discussing the budget crunch, council also talked about ways to perk up the economy over the long haul.

Some suggestions toward that goal included building an 18-hole golf course or a driving range at the Glenwood Meadows property, opening up a sledding hill so parents could drop their kids off and shop, and using the Glenwood Springs Chamber Resort Association to draw shoppers to town from nearby towns, as well as tourists.

These amenities could be added to the existing activities in the area such as fishing, skiing, swimming at the Hot Springs Pool and skating.

“Throw all those things out there and it’s bound to hit a button with someone,” Glenwood Springs police chief Terry Wilson said.

An 18-hole golf course also could draw more conferences to the area, Gillespie said.

“One piece of the puzzle we don’t have is an 18-hole golf course,” Gillespie said.

Looking forward into the fiscal future, it is hoped that the tram leading up to Glenwood Caverns and retail outlets at Glenwood Meadows will help boost the city’s revenues.

Council members also talked about starting an ad campaign aimed at luring high-tech companies to Glenwood Springs.


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