Better sales than expected in March spur Basalt to revise 2020 expectations
Basalt’s sale tax revenues from March gave the town government guarded hope that 2020 finances won’t plummet as drastically as originally feared because of the coronavirus crisis.
The town collected about $70,000 more than expected in the April sales tax report, which reflects sales in March.
It’s not like March was rosy. The Roaring Fork Valley’s economy took an abrupt hit March 15 when Colorado Gov. Jared Polis ordered that ski areas close for the season. Restaurants were closed a short time later and a stay-at-home order was issued March 25.
Basalt restaurants saw sales drop by more than 40%. Lodging was down 50%. Retail food, on the other hand, was up 23.6%, which reflects strong sales by Whole Foods and City Market.
Officials in Snowmass Village said Monday night that their month of March was not as bad as feared. However, Aspen officials said last week they will look to cut more than $16 million from this year’s budget because of the revenue forecasts.
The Basalt town staff released a dire financial outlook last month based on the business closures and uncertainty on reopening. However, since results were brighter than expected in March, the town staff adjusted its outlook for the year.
“Therefore, the revenue modeling through the rest of the year was adjusted upwards also,” said a memo from the town staff to council.
The town staff’s revised picture foresees a reduction in revenues of about $1.34 million for all of 2020 compared to budget. The town anticipates revenues for its general fund of $6.2 million. That’s been improved from a projection last month of $5.9 million.
In addition to the possibility of slightly better sales tax revenues, it appears the town will retain significant building permit revenues. Aspen Skiing Co. has started construction on its affordable housing project in Willits. The Arts Campus at Willits and the Steadman Clinic also are seeking a building permit for structure adjacent to the Skico housing.
The town has trimmed its expenses for 2020 to match the anticipated reduction in revenues.
“As a result, critical infrastructure and general fund expenses totaling $1,155,718 will be postponed until additional financial results are available,” the town memo said.
Town Manager Ryan Mahoney said no one is thinking the economy will boom this year. Further adjustments might be needed as the year unfolds.
“I think April’s numbers will be more telling,” Mahoney said.
Basalt Town Council members discussed Tuesday night ways to stimulate the town’s economy once closure orders are lifted on more businesses. New Mayor Bill Kane proposed a program called Basalt Bucks, which he implemented when he was town manager in 2008-09, when the country was recovering from the Great Recession.
In a nutshell, the town would subsidize a program that would provide an incentive to residents to patronize Basalt businesses. Kane said a person could purchase $100 Basalt Bucks for $75 cash at Town Hall. When the money is spent, businesses could come to Town Hall to recoup the Basalt Bucks as cash.
“It really worked well in ’08 and ’09 when we really needed to keep the economy moving,” Kane said. “Drastic times call for drastic measures.”
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