City tax revenue in free fall

Grand Junction’s sales- and use-tax revenue plunged 26 percent in July compared to the same time last year, a continuation of a yearlong slide in the city’s primary funding source that will force additional budget cuts.

Receipts from sales generated in July and reported in August totaled $3.5 million, nearly $1.3 million less than the same time last year, according to Jodi Romero, financial operations manager.

Year-to-date, revenue is off

16 percent compared to a year ago.

“I am not surprised,” said Diane Schwenke, president of the Grand Junction Area Chamber of Commerce. “I think it comments on just how fragile our economy is and in terms of how much worse it might be getting.”

The largest tax revenue decline since the oil shale bust fallout

25 years ago will lead to supplemental reductions in this year’s budget, even as officials are beginning to prepare the city’s 2010 budget. Department heads are now reviewing their ledgers to identify areas where they might find additional savings.

The city already has trimmed or planned to trim $7.5 million this year through a hiring freeze and reductions in capital and operational spending.

Romero said she expects additional cuts to follow along those same lines. She said officials don’t know yet how much more expenditures will need to come down to account for the loss of revenue.

“We’re more interested in having department directors and fund managers get to a point where they feel like they’ve cut out as much as they can and feel like they can still deliver services,” Romero said.

The city to this point has resisted implementing salary freezes or reductions or laying off employees, which has drawn criticism from some in the community who claim the city’s employee base is too large.

City officials say it would cost more to rehire and train employees once the economy improves.

Schwenke said retailers in July were hit with the double whammy of a dearth of energy industry jobs and a drop in out-of-town spending at the height of the tourist season. She said back-to-school spending should bump up August tax receipts. But she doesn’t foresee a significant economic recovery locally until 2010.

“All the indications I see right now, I don’t think we’re going to see any major glimmers of

‘We’re on the right track’ until next year,” she said. “We came into this (recession) later than other folks, and even though nationally we’re starting to hear some good things, we’re going to ride behind in terms of the good stuff.”

For Schwenke, less tax revenue wasn’t the only indication last week of a lack of spending. The chamber’s job fair at Mesa Mall drew 500 to 700 people searching for a job.

Schwenke said that was three to four times as many people who have showed up in the past few years.

“It was really kind of gut-wrenching, seeing all those folks out there looking for a job,” Schwenke said. “Everybody from the teenager looking for his first job to folks who have to be nearing retirement age or are in retirement age.”

Meanwhile, far fewer employers were looking to hire. Last year, 60 companies set up booths at the mall.

This year, there were 28, Schwenke said.


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