Rifle sales tax revenue not expected to turn around | PostIndependent.com

Rifle sales tax revenue not expected to turn around

The first half of the year was not good for the city of Rifle’s financial health.

The bad news is the second half may be more of the same.

That’s what city Finance Director Charles Kelty said of the city sales and use tax revenues through the end of June, which provide the bulk of the city’s yearly revenue, and his expectations for the rest of the year.

While some categories have shown increases, Kelty noted those are largely due to the city’s 3/4 cent sales tax, which was approved by voters last year to help pay for a $25 million water treatment plant. That revenue can only go for that purpose.

Kelty projects the city could finish the year with $7.26 million in sales and use tax revenue, compared to $8 million in the city budget.

“I’m projecting a $379,000 shortfall in sales tax revenue for the general fund,” Kelty said. “We do have other sources for the general fund, but they’re pretty small in comparison. So I think we should be fairly close to break even.”

Through the end of June and including the 3/4 cent sales tax, total sales tax revenues are $3.6 million, an 11 percent increase from the previous year’s $3.2 million.

Among the various categories, Kelty noted oil and gas has been down substantially all year.

“Bell Supply closed in January, and we understand corporate has no plans to reopen any time soon,” he said.

Most of the revenue in the oil and gas category comes from use taxes energy companies pay when they ship pipelines and other equipment through the city, Kelty said.

A bright spot is the city’s lodging and motel sales taxes, Kelty pointed out. Lodging tax revenues are $55,600, 8 percent more than the previous year’s $51,500, he said.

“I’m not sure if that means more people are traveling and stay a night in Rifle or if they’re staying longer,” Kelty added.

The fall hunting seasons, once a boon for city sales tax revenue, have flattened out in recent years, Kelty added.

“I know the [Rifle Area Chamber of Commerce] promotes it, so if we do have good hunting seasons, it could turn it around some,” he said.

Overall though, Kelty said smaller rural areas like Rifle are not seeing their local economies recover from the 2008 recession like their larger urban counterparts.

“We were behind in seeing the effects of the recession, so we’re probably a little behind in seeing the turnaround, too,” he said. “It’s usually a year or two behind.”

Here’s how the city did through the first half of the year in other key categories:

• Total general fund revenues are nearly $3.6 million, compared to the prior year’s almost $3.9 million and $333,000 and 9 percent less. Total general fund expenditures are $3.8 million, compared to the prior year’s $4.2 million and $437,600 and 10 percent less.

• Total sales, use and lodging tax revenues for the six months ending June 30 is $3.9 million, a 10 percent increase from the previous year’s $3.6 million. Again, this includes the 3/4 cent sales tax increase.

• Building and motor vehicle use tax revenues are $304,000, a 1 percent decrease from the previous year’s $307,000.

• Water fund revenues are $2 million, compared to the prior year’s $1.2 million and $749,400 and 59 percent higher. The main reason for the increase is the 3/4 cent sales and use tax, which has generated $691,900 through June 30.

• Water fund expenses are $1.4 million, compared to the prior year’s $1.38 million and $32,000 and 23 percent higher. Operating and maintenance expenses are 1 percent less than last year. Water rights expenses are 30 percent less than last year, while water system capital expenses are 32 percent higher than last year.

Support Local Journalism

Support Local Journalism

Readers around Glenwood Springs and Garfield County make the Post Independent’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Each donation will be used exclusively for the development and creation of increased news coverage.

For tax deductible donations, click here.

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User