Basalt feasts on revenue from grocery-store sales
February 10, 2013
BASALT – Basalt town government coffers enjoyed a feast of sorts from having two major grocery stores open for the first time during Thanksgiving.
Sales tax revenue was up 18 percent in November from the prior year. Retail food outlets led the way, according to the December report, which reflects taxes collected on sales in November.
Whole Foods Market opened in mid-August, so this was the first Thanksgiving period that reflected extra sales. Basalt also collects revenue from the El Jebel City Market and Clark’s Market. Sales tax revenue from all retail food outlets was up nearly 41 percent for the month compared with last year, said the report by town Finance Director Judi Tippetts.
Basalt collected $128,112 in taxes from retail food sales. That amount dwarfed even the pre-recession collection in 2008, which was $106,545. Grocery-store sales fell in 2009 and were flat in 2010 and 2011.
Town Manager Mike Scanlon, who took the post last fall, said the sales tax collections are reassuring for someone new to the job. The town collected about $286,855 more than it budgeted in sales and use tax revenue for 2012. It’s a lot easier to figure out what to do with a surplus than a deficit, Scanlon said.
Relying heavily on sales tax revenue from grocery sales gives Basalt stability, he added, because people still buy food even during tough economic times. Retail food sales are, by far, the biggest sector of Basalt’s economy. For the 12-month period starting in December 2011 through November 2012, Basalt collected $1.48 million from grocery sales. That was up 12 percent from the prior year and exceeded the $1.44 million collected in 2008, before the recession really whalloped the Roaring Fork Valley.
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Groceries accounted for 43 percent of all sales taxes collected by Basalt and roughly 25 percent of all revenue for the town government in 2012.
Scanlon said there was likely a honeymoon period where shoppers were trying Whole Foods. Maintaining a 12 percent annual increase in sales tax revenue from grocery sales will be tough, he said.
Overall, for the 12 months ending in November, Basalt’s overall sales tax revenue was up 7.85 percent from the prior 12 months, Tippett’s report showed. Total revenue was $3.43 million. That was better than every year back to the $3.80 million collected in 2008.
“We’re not back to the 2008 level, but we’re back to 2009,” Scanlon said, adding that the five-year trend looks good.
Other areas of Basalt’s economy that performed well in 2012 were general retail, up 12.39 percent; sporting-goods retail, up 8.56 percent; and restaurants with bars, up 7.19 percent. Businesses selling construction materials, which took a beating during the recession and aftermath, were up 7.35 percent over the prior year but still far behind the 2008 sales level.
The November sales tax collection report is the latest available.