2008 tax revenue tallies at 7.7 percent projection
Grand Junction’s immunity to the sour economy in terms of retail spending faded at the end of last year, as city sales-tax revenue increased a scant 1 percent over the same period in 2007.
The city collected $11.54 million in revenue from retailers in October, November and December, compared to $11.41 million in 2007.
The biggest drop-off occurred at drug stores and in building materials, which reported revenue declines of 20 and 7 percent, respectively.
On the other hand, shoppers continued to buy products at service stations (17 percent increase over last year) and liquor stores (14 percent increase).
“We’ve definitely seen an impact” from the economic decline, Financial Operations Manager Jodi Romero said.
Even with the slowdown in spending, shoppers here opened their wallets wider than shoppers did elsewhere. Sales-tax revenue across the nation slipped by an average of 4.6 percent in the fourth quarter, Romero said.
And the small uptick in revenue didn’t prevent the city from reaching its sales- and use-tax revenue projections for the year. Romero predicted the city would collect 7.9 percent more revenue than 2007, and the final tally came in at 7.7 percent, up from $54.5 million in 2007 to $58.7 million in 2008.
The amount of sales tax collected in December, which is reported by businesses in January and counts toward the city’s total revenue this year, won’t be known until later this month.
But that amount will help city finance officers begin to determine whether the city will reach its projection of a 9 percent increase in sales and use tax revenue in 2009.
“We’ll definitely continue to see some impacts from the breakdown in the economy that way (in sales-tax revenue),” Romero said.
“To me, it’s a question of how much we continue to be somewhat insulated from what the rest of the nation is experiencing.”
As a precaution, city department heads largely have suspended new spending for the first quarter of the year. New hires and capital spending could be further delayed if city revenues plateau or drop.