Slight uptick in tax revenue is predicted for next year
Approaching the end of a year in which their budgets absorbed the biggest decline in sales-tax revenue in more than a quarter-century, Mesa County and Grand Junction financial officials are forecasting only slightly brighter financial pictures next year.
The city predicts receipts from its 2.75 percent sales tax will inch up 3 percent in 2010, while the county estimates revenue from its 2 percent tax will inch up 1.5 percent.
“I know they’re trying to be conservative,” county spokeswoman Jessica Peterson said. “They are certainly hoping for some recovery but not expecting it to be sudden and swift.”
City Financial Operations Manager Jodi Romero said city officials are watching a number of economic indicators, including national retail sales, unemployment rates and the real estate market.
While a 3 percent growth projection may seem optimistic to some, given the fact the city’s sales-tax revenue is expected to drop close to 15 percent this year compared to last year, Romero said she believes it’s actually pretty conservative. She noted that even factoring in the city’s lean years after the oil shale bust in 1982, sales-tax receipts have increased more than 7 percent annually since the early 1980s.
But Diane Schwenke, president of the Grand Junction Area Chamber of Commerce, said she’s holding out little hope for an economic recovery next year.
She has reduced the chamber’s 2010 budget, expecting some businesses won’t renew their memberships, which account for nearly three-quarters of the chamber’s revenue.
Schwenke said a survey of chamber members a few months ago found only 30 percent believed the local economy would bounce back in the first half of next year. Twenty percent didn’t expect improvement until 2011.
Schwenke said most businesses she has talked to are expecting a tough winter.
“I think this holiday season will be make it or break it for a lot of folks,” she said.
She said she thinks commercial properties haven’t experienced the worst of the recession yet. Financial experts indicate commercial growth follows a swell in new home construction, but it works both ways, she said. Mesa County has seen a spike in home foreclosures in the past year, and Schwenke fears businesses could absorb a significant hit.
“We’re just starting to see the beginning of the commercial fallout,” she said. “We’ve had a substantial amount of small businesses hanging out there, and the longer this goes, the less likely they’re going to be able to survive.”