Business Monday: Basalt sales tax collections going gangbusters
While questions remain about Basalt’s future property tax revenue, there’s no doubt that sales tax revenue is going gangbusters.
The town has collected $4.19 million for the year-to-date through August. That is up 7.4% from the $3.90 million collected at the same point last year, according to a report by town finance director Christy Hamrick.
She noted that 2018 ended strong, so it remains to be seen if 2019 can continue to pace ahead.
“Sales tax for 2018 totaled $6,086,425, and the town budgeted $6,425,113 for 2019, representing a 5.5% increase in sales tax budgeted,” the report said. “It is not yet certain whether we will achieve that goal, however, at this point it seems likely.”
Sales tax revenue is a big deal for Basalt. It accounts for about 56% of general fund revenue.
The sectors of the economy that are faring best in Basalt this year are automotive, lodging, general retail and building supplies. Grocery stores, restaurants, liquor stores and sporting goods retailers have logged more modest gains.
Automotive businesses revved up with an 11.8% increase in sales this year through August. Lodging booked a 26.7% increase. General retail is up 22.3%. Building supplies hammered out a 35% increase.
Retail food sales by the two big grocery stores and smaller vendors make up the single biggest chunk of Basalt’s sales tax pie. They have combined for $1.49 million in sales so far this year, up 1.4%.
Restaurants with bars are essentially flat with last year through August while restaurants without bars skidded almost 10%.
Liquor stores are up 2.7% year-to-date while sporting goods retailers are up 3.3%.
Early indications are that Basalt enjoyed a strong summer. The sales tax report just for the month of August shows sales for the month were up 10.7% — with particularly strong showings by general retail (up 36%), automotive (up 39%), lodging (up 20%), restaurants with bars (up 9%), sporting goods retail (up 6.6%), liquor stores (up 14.3%), building materials (up 14.2%) and retail food (up 10.2%.)
For the month alone, the town collected $642,131 in sales tax revenue compared with $579,957 last year. The August sales tax report reflects actual sales in July.
The 10.7% increase for the month “could partially be attributable to the Lake Christine Fire last year,” Hamrick’s report said.
Numerous businesses experienced a few days of closures starting July 4, 2018, as the fire raged on Basalt Mountain. Heavy smoke into August also kept some second-home owners and travelers away.
Meanwhile, Basalt town government will have a better idea about its property tax revenue stream after the Nov. 5 election. The town is asking voters to approve a general operating property tax rate of 5.957 mills. That’s the same mill levy as was assessed in 2018. However, the town needs voter approval because it went awry of the Colorado Taxpayers’ Bill of Rights.
If the measure fails, Basalt must drop its level to 2.562 mills. The difference to the budget is about $700,000.
Property taxes account for 12 to 15% of the general operating budget. The town collected $965,000 in property tax revenue last year.