There’s a good reason why January sales tax receipts generally provide an important measure of how the local economy is faring — and why this January is especially relevant.
It’s the largest month for sales tax collections. That’s because January collections reflect holiday spending in December. January accounts for about 10% of the total collected for the entire year. The remaining months average about 8%.
After nearly a year of pandemic-induced economic hardship, we might have expected January 2021 to be well behind January 2020, which was up 4% from January 2019. But this January showed a nearly 2% increase over 2020 collections, indicating that the local economy isn’t too badly bruised.
That’s not to say that it’s business as usual across the board. As the Sentinel’s Dan West reported, construction, general merchandise like big box stores, grocery and liquor stores, and online retailers performed well. If Grand Junction is a reflection of national trends, it’s small businesses — particularly restaurants and bars — that have suffered most.
They may have suffered more if local leaders hadn’t collaborated to create a Five Star program. The Grand Junction Chamber of Commerce partnered with Mesa County Public Health to devise a certification program for businesses committed to the best practices to keep employees and customers safe during the pandemic. It let businesses operate a greater capacity than what the state’s COVID-19 dial would have otherwise allowed.
The chamber estimates the Five Star program had a positive impact in excess of $13 million for the food and beverage industry in Mesa County. More than 600 business have applied.
“In an industry that saw the devastating effects of the pandemic more than most, we are proud of how our advocacy efforts resulted in saved jobs and greater income for these many small businesses,” said Diane Schwenke, president and CEO of the chamber.
It’s tempting to refer to these economic challenges in the past tense, especially now that an aggressive vaccination program is underway. January’s stronger-than-expected sales tax collections have effectively signaled for the city to expect a return to pre-pandemic levels of economic activity that guide city spending.
But we’re not out of the woods yet. Mesa County has experienced single-digit daily new COVID-19 case counts recently. If we don’t want that to be a mere blip, we must continue to do all the things that have kept the virus from swamping hospitals and restricting the economy. That false sense of security will be with us until the majority of county residents are vaccinated.
The Five Star program will continue to play an important role in 2021. We anticipate that the next iteration may actually help drive vaccinations. Leveraging the success of the program to encourage vaccinations is something we hope the program’s braintrust will consider.