Basalt’s economic winning streak comes to an end
Sales tax revenues fall in November, but officials say no worries
Basalt’s bubble has finally burst, sort of.
The town’s economy defied the pandemic by registering five consecutive months of double-digit increases in sales from June through October. That came to an end in November.
The November sales tax report, which reflects sales activity in October, was down 1.6 percent compared to the year before.
But town finance director Christy Chicoine wrote in her report that the decrease isn’t due to cautious consumers.
“This decrease is due to a timing difference in collection vs. receipt that has artificially decreased the numbers in the retail food industry for this one month,” Chicoine wrote.
As a result of that timing issue, retail food sales were down 31.6 percent for the month, the report showed. In reality, Basalt’s two grocery stores and other retail food vendors have enjoyed a very good year with people cooking at home more often due to the pandemic. For the year-to-date through November, retail food sales are up 8.8 percent.
Basalt’s economy has weathered the COVID-19 storm relatively well up to now. Sales were down in April, when a stay-at-home order was in place and the economy absorbed the initial shock of the pandemic. But sales in May through September were up between 14 percent and 29 percent compared to the same months in 2019, according to the monthly sales tax reports.
Chicoine has noted each month that a new Colorado law in 2019 requiring tax collections on online sales has produced a positive economic punch for the town government.
Even with sales falling in November, there were still signs of a strong economy. Lodging sales were up 36 percent. Restaurants with bars were up 71 percent. Retail and sporting goods sales were up 10 percent and 18.5 percent, respectively. Building materials sales were up 53.5 percent as the construction boom continues. Retail liquor kept the COVID surge going with a 44.6 percent increase for the month.
Basalt collected $646,571 in sales tax revenues for the month. That was an increase of 5.5 percent over what was expected in a model developed when the pandemic struck.
For the year-to-date, with only one month left, sales tax collections are up by $907,584 or 15 percent. Basalt has collected just shy of $7 million in sales taxes for the year. While most of the sales tax revenues go to the general operating fund, about $2.2 million will go the Parks, Open Space and Trails fund.
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