Rifle’s August sales tax numbers not as bad as other months, but…
Citizen Telegram Editor
The numbers continued to be lower than expected for August, but not quite as low as preceding months.
That’s how Rifle Finance Director Charles Kelty described the latest sales tax numbers for the city, where the local economy has lagged behind others in the region, state and nation in recovering from the Great Recession of 2008.
Kelty recently reported to the city council that total sales, use and lodging tax revenues for the eight months ending Aug. 31 was just under $5.4 million, a 13 percent increase from the previous year’s $4.7 million.
Sales tax revenues were nearly $4.9 million and 13 percent more than the previous year’s $4.3 million. However, Kelty said the increase is misleading, since it includes nearly $120,000 from the city’s 3/4 cent water treatment plant sales and use tax.
That tax has generated more than $935,000 through the end of August and that revenue can only be used to help build and pay for the new $25 million plant.
When the water treatment plant sales and use tax collections are removed, the city is actually seeing approximately 7 percent less sales tax revenue than 2012, Kelty explained.
Two other revenue sources were higher than expected, Kelty noted. Building and motor vehicle use tax revenues were $438,000 and 11 percent higher than last year’s $393,000. Lodging tax revenues were more than $81,000 and 8 percent more than the previous year’s nearly $75,000.
While Rifle’s sales tax revenue has performed poorly all year and much of 2012, just seven miles away, the Town of Silt recently noted a 12 percent jump in its sales tax numbers through the first three quarters of the year.
Kelty said Silt’s increase was most likely due to the addition of new businesses, such as the Family Dollar store.
“If you can get a couple of new businesses to open, it will help your revenue base,” he said. “We’re still struggling and we haven’t wooed any new businesses recently.”
Silt officials are also negotiating an incentive deal to see a Subway restaurant built in town.
About seven miles west of Rifle, the Town of Parachute is struggling along with Rifle, said Acting Town Administrator Cary Parmenter.
“We’re looking at about a 20 percent drop in sales tax revenue this year,” he said. “But we were expecting a 30 percent drop.”
Like Rifle, Parachute is overwhelmingly dependent on the natural gas industry for economic growth. Parmenter said the 20 percent drop equals about $300,000 less in town revenue out of a $1.5 million general fund.
In his opinion, Kelty said one positive move that might help Rifle is if a national restaurant chain were to locate next to the Brenden 7 Theatres, which is on city-owned property. The city receives lease payments from the Brenden Corp. under an incentive contract used to help Brenden build the theaters.
“But you don’t want to just spread out your sales that you already have by opening something that’s already here,” Kelty added. “If you can get something different, then you get new revenue. But a lot of times that’s hard to do with economic development.”
For August, Kelty said positive numbers were seen in the food and general retail categories in August, while oil and gas – the key category that affects all others – was up by 23 percent.
“But for the year, they’re still down 37 percent from last year,” he added.
Kelty said general retail showed a slight up-tick, and added preliminary September sales tax figures show the city may be up by 1 percent, which would be the first monthly increase over the previous year in about a year and a half.
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