Basalt freezes hiring, salaries
August 27, 2009
BASALT – The Basalt town government is paring its spending until the revenue picture from throughout the summer becomes more clear.
Town Manager Bill Kane told the Town Council this week the staff instituted a hiring freeze and wage freeze until further notice. No new requests for funding from community groups will be considered and even some budgeted expenditures will get a second look, he said.
The only exception to the hiring freeze will be an officer in the police department. A job has been offered to a cadet in training.
The decision comes after sales tax revenues fell 17 percent in June despite the town government’s best effort to jump-start consumer spending. The town government created a homegrown stimulus plan that awarded consumers with a $30 gift certificate for each cumulative $300 they spent at participating shops and restaurants.
The program was deemed a success because consumers burned through the initial 1,500 gift certificates before the end of July. The Town Council allocated $45,000 to cover the cost of the gift certificates, and added $30,000 for another 1,000 certificates. Those have also been used and the program is over.
Town officials as well as merchants hoped that the program would spur spending to close to last year’s level for the summer months, Basalt’s busiest season. The results were a disappointment, Kane said. Without the program, sales might have been even worse.
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For the fiscal year to date, December through June, Basalt’s sales tax revenues are down 10.7 percent from the prior year.
In June, the biggest eye opener for Basalt officials was the decrease in sales by retail food establishments, which include City Market. Sales by all retail food outlets were down 8 percent for the month.
Kane said it is impossible to determine what the drop in retail food sales means, but a possibility is that the valley “is losing population.”
July sales information won’t be available until sometime in September. There is a lag between the time businesses pay taxes to the state, and the state forwards them to the town. Kane said he and town finance director Judi Tippetts are collecting “intelligence” from merchants in Basalt to get a jump on gauging business in July. So far, he said, a couple of sources have reported to him that their sales were better this July than in July 2008. Nevertheless, Kane will maintain a cautious approach with the town budget.
“Until we have hard numbers, we’re clamping down,” he said.
Carbondale officials are also prepared for new budget realities. Sales tax revenues were down 21.5 percent for Carbondale in June compared to the same month the prior year. Town officials project an 18 percent sales tax revenue decrease for the year.