After decline, sales tax report shows slight glimmer of hope

052810 Sales tax zones

Grand Valley shoppers showed signs of shedding their reluctance to buy toward the end of the first quarter of this year, but their purchases remained well below what they spent in the first three months of 2009.

After a January in which Mesa County, Grand Junction, Fruita and Palisade saw sales-tax revenue declines of at least 14 percent, spending recovered slightly in February and March. But revenue collected for the quarter still ended down by double digits compared to last year for three of the four local governments.

The city of Grand Junction reported $9.6 million in sales tax in January, February and March, 13 percent less than last year and 11 percent below what the city budgeted.

In addition, revenue collected by merchants in December, January and February and reported to the city in January, February and March dropped in every business category and in every part of the city compared to the same time frame last year.

City Financial Operations Manager Jodi Romero noted city sales tax revenue in March was off just 4 percent compared to last year, an improvement from January, when revenue was down nearly 18 percent compared to January 2009.

“There are some positive signs we’re moving the right direction,” she said.

Mesa County budget managers adjusted the county’s sales-tax projections after witnessing a drop of more than 13 percent in the first quarter. Finance officials have changed their forecasts from a 1.5 percent increase in receipts to a 7 percent decrease.

Yet the numbers at the end of the quarter look better than they did at the beginning of the year. County sales-tax revenue was off 24 percent in January. It was down 14 percent in February, then slid just 4 percent in March.

“We certainly don’t expect (revenue) to come back quickly, but hopefully we’ve bottomed out and we can begin to grow,” county Finance Director Marcia Arnhold said.

In Fruita, revenue from the city’s 3 percent sales tax is holding steady compared to last year. The city collected more than $283,000, less than $2,000 less than the first quarter of last year. But factor in Fruita’s share of the county’s 2 percent tax, and the city has about $60,000 less in tax revenue so far than it did last year.

City Clerk and Finance Director Margaret Steelman said the city took in a little more revenue in the first quarter than she thought it would. At this point, she said the city continues to stand by its projection of no sales-tax revenue growth this year.

“We’re continuing to monitor it pretty closely,” she said. “We’re not making any adjustments but we’re ready to do so at any time if we need to.”

Palisade continues to rebuff the recession in terms of the revenue it’s pulling in from its 2 percent sales tax.

First-quarter receipts totaled just under $40,000, a nearly 5 percent bump over last year. But overall tax revenue, including the town’s share of the county tax, is off by nearly $40,000.

The precipitous slide in January prompted the town to slice roughly $250,000 out of this year’s budget. Town leaders believe that will be sufficient to get them through the year, particularly with the tax revenue decline giving indications that it’s slowing down.

“It looks like to me it’s starting to flatten a bit,” Town Treasurer Amy Palmer said.

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