Basalt sales tax falls in June despite stimulus
August 22, 2009
BASALT – Basalt’s homegrown stimulus package this summer didn’t prevent sales tax revenues from slipping almost 17 percent in June.
The town government tried to stimulate sales by offering $30 gift certificates to consumers for each cumulative $300 expenditure they made at participating shops and restaurants. The program was a success, with the town burning through $45,000 in gift certificates by mid-July, then approving another $30,000 for additional certificates, which are now used up.
Despite that success, it didn’t help pull the town out of a sales tax tailspin. The town collected $266,178 in taxes from retail sales in June this year compared to $319,422 for the month last year. (Actual sales from June get recorded as July revenues for the town.)
Basalt Mayor Leroy Duroux said it is impossible to determine if Basalt’s stimulus program prevented spending from sagging even more. “One will never know, but just guessing, it probably would have been worse,” he said.
Town finance director Judi Tippetts, who helped craft the stimulus program, said the tax collections from June sales were disappointing. “It’s not what we hoped for,” she said.
Like Duroux, she said the stimulus might have prevented the sales tax collection decrease from exceeding 17 percent.
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“We took a $53,000 hit. Would it have been $75,000? I don’t know,” Tippetts said.
Sales by general retail shops were down almost 36 percent in June, according to Tippetts’ sales tax report. Sporting retail stores saw sales fall 9.34 percent.
Restaurants with bars were one of the few bright spots for Basalt’s economy in June. Sales were up 9.21 percent, according to Tippetts latest sales tax report. Restaurants without bars saw sales slip almost 24 percent compared to the same month last year.
Liquor stores saw sales surge by 22.5 percent in June.
On the other end of the ledger were retail food establishments, which are the single biggest contributor to Basalt’s sales tax pie. That category of businesses, which includes City Market and Clark’s Market, were down almost 8 percent. Sales tax revenues collected by retail food establishments fell to $105,208 from $114,121 for the month the year before.
Sales of building materials were off 44.5 percent. Lodging was down 48 percent in June.
Basalt’s experiences aren’t out of line with what happened elsewhere in the Roaring Fork Valley in June. Sales tax collections in Aspen for June were down 14 percent from the same month in 2008. Glenwood Springs experienced a 17 percent decline.
For the fiscal year-to-date, which reflects sales in December through June, Basalt is down 10.7 percent. That will weigh on the minds of the town council as it dives into the budget process in September. Duroux said he favors taking a “conservative” approach with the 2010 budget.