A report indicating a drop in sales tax figures has some county officials more worried than others.
Sales tax figures released late last week show a decrease of 8.79 percent year-to-date for the Town of Pagosa Springs and Archuleta County, as compared to 2008. September sales taxes are down 17 percent compared to September 2008.
The figure is based on sales tax earned through September.
“It was an eye-opener and I really feel for the town because they rely so heavily on this,” County Commissioner John Ranson said.
The town and county split total sales tax revenues. The town relies on sales tax revenues for about 72 percent of its 2009 budget. The county relies on sales tax for about 14 percent of its 2009 budget.
County Administrator Greg Schulte said that, while the numbers are not what the county wants or likes to see, and while the numbers are being watched, they’re not a big source of concern.
“Yeah, it’s down. It’s concerning. From a purely fiscal standpoint on the county’s side, we are still trending towards where we thought we’d be, and I think that’s a good thing,” Schulte said.
He stressed that, while sales tax figures are down 8.79 percent, they are still within the projections the county made for its budget and are following the projected trend — something more of a concern to him.
“What I look at is the trends and then what I look at is how we’re progressing towards what our goal is,” he said.
Projections for a further decrease in sales tax in 2010 have been made, Schulte noted. He believes the county is being “reasonably conservative.”
Schulte also added that collections are only down 3.49 percent year-to-date based on a five-year historical average — something he follows more closely.
Commissioner Bob Moomaw echoed that the numbers were not ideal, but were not a huge source of worry.
“Obviously this last month was lower than I think any of us expected,” Moomaw said. “It just indicates that we have to be extremely diligent in our spending so we don’t get into trouble. Fortunately the county’s not dramatically down from the projections that we were forecasting most of our revenues on. But, it makes budgeting harder. It, fortunately, was mostly planned for, so it’s not causing a crisis.”
While not yet a crisis, Ranson is not taking the numbers lightly, especially the 17-percent September decrease over a year ago.
“Honestly, I’m alarmed at the decline, because last year at this time we had September, October, November, which was a really messy time in the national economy when everybody just kind of quit spending money, so we’re also comparing with some weaker numbers from last year,” Ranson said, adding, “it sure doesn’t bode well.”
Ranson is also concerned with the county’s year-end numbers because of the number and expense of unbudgeted items coming before the BoCC, a concern that’s leading him to oppose unbudgeted fund requests.
In the Tuesday BoCC regular meeting, Ranson opposed the county spending $5,628 for radios for Emergency Operations. Though Ranson was defeated in the vote, he made a statement about his financial concerns.
“We’ve had a year where we’ve spent $90,000 on compensated absences, $100,000 on a court settlement, neither of which were budgeted, and we’re trying to come into year end with a reserve,” he said at the meeting.
He commented that reserves are a necessary component in financial recovery and that diligence in spending is required in this economic environment.
Ranson wrapped up his comment at the meeting by saying, “It’s just a tough time as we come into year end for me to approve anything because I don’t have a comfort level yet of how we’re going to finish the year with retail sales being down 17 percent. We’ve still got some questions between now and year end.”
Ranson does see the treasurer office’s annual tax lien sale as a bright spot and a help in year-end figures.
“We’ve been very fortunate, we had a really good tax lien sale ... that was really successful and that’s helped our year end,” he said.
Though concerned with overall numbers, both Ranson and Moomaw are relatively pleased with the lodging tax figures.
According to sales tax documents, taxes for Accommodation and Food Services, which include lodging and restaurants, are holding relatively steady. For the month of September, $112,921 in sales tax was collected for town and county, versus $113,568 in 2008 and $123,459 in 2007.
Ranson mentioned that the BoCC had spoken with other counties with higher lodging rates that were seeing declines in the category’s taxes.
“This is total speculation, but we’ve kind of talked about, you know, maybe people are coming here because it is a little bit more affordable place for vacation and they may be brown bagging it, you know, buying in the grocery store (Ranson also noted a rise in grocery sales tax) and eating in the condos or whatever, but they’re definitely coming, so that’s good news,” Ranson said.
Moomaw also looks at tourists as a source of hope.
“I think that Visitor’s Guide has been extremely helpful in bringing tourists here as the lodging receipts indicate. The problem is they’re just being very conservative in their spending and I think that tourist guide has been very helpful in getting people here. We need to continue that hard work and hopefully this coming year, with events and the like, we can get things to turn around,” Moomaw said.
While thankful for the tourists, Moomaw is also looking to the holidays as a sign of what 2010 will hold.
“I think this Christmas season is going to be extremely telling on what’s going to be happening this next year,” Moomaw said.