City tax revenue recovers after jolt

Black Sunday, when Exxon canceled an oil shale project, thrust locals and the Grand Valley headlong into a recession. But the ensuing economic devastation that started May 2, 1982, was peanuts compared with the recession that swept Grand Junction starting in 2009, city leaders heard during a meeting Monday.

The downward spiral of sales tax revenue that began two years ago was the largest decline in 30 years, with a decrease of $12.5 million from 2008 to 2010.

“Our bar was very high, so it was understandable when we dropped so much,” said the city’s financial operations manager, Jodi Romero.

City leaders are hosting a series of meetings for residents about city finances and spending and the city’s economic outlook. The next meetings will be from 6:30 to 8:30 p.m. Wednesday and 9 to 11 a.m. June 17 in the auditorium at City Hall, 250 N. Fifth St.

Sales tax revenue is holding steady, though it is not nearly as robust as before the latest recession, when the city averaged a yearly increase of 6.5 percent for three decades.

“I don’t see us coming out of this quickly, but at least we’re not going backward,” City Manager Laurie Kadrich said.

Total sales tax collection for April came in at $4 million, compared with $3.7 million for April 2010.

However, the outlook for Grand Junction’s finances is shaky, with not one substantial commercial development in the works. One of the city’s larger projects, American Furniture Warehouse near the Rimrock Avenue Wal-Mart, is the only large project under way.

Government construction projects, such as the Public Safety Center near Pitkin Avenue and Sixth Street, and renovation of the Wayne Aspinall Building, 402 Rood Ave., are not subject to sales tax.

Sales tax is collected on construction materials and on other goods sold commercially.

“We haven’t had any applications come in that are substantial,” Kadrich said of commercial construction projects. “We are on track to have a worse year in 2012 than in 2009.”

Another component in the city revenue formula is steadily increasing use tax collection. Use taxes are collected for capital purchases for businesses, which, in Grand Junction, generally means businesses in the energy sector. When use tax collection increases, businesses tend to hire more workers, Kadrich said. However, those jobs have not materialized, she said.

Overall, Mesa County lost 10,000 jobs as a result of the recession.

“Companies are investing in capital and some are having their best sales years,” Kadrich said. “But they’re not hiring workers or they’re not hiring many workers.”


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