December sales down 19.3 percent in Aspen
ASPEN ” A dismal end to 2008’s retail and lodging business in Aspen was punctuated by a 19.3 percent drop in sales tax revenue for December, according to a consumption tax report released Friday.
The city collected $11.3 million in sales taxes in 2008, nearly $800,000 below its budget projections for the year, the report indicates.
December retail sales were $62,013,578. Retail sales for all of 2008 totaled $510,655,773, representing a 0.5 percent increase over 2007.
Tourist-oriented sales dropped in December. Sports equipment and clothing, clothing stores, specialty retail and tourist accommodations collectively account for 50 percent of the city’s annual taxable retail sales.
The largest industry category, tourist accommodations, was down considerably in December, but for the entire year, it was 3.4 percent better than 2007. Likewise, lodging tax collections for December were down 12.4 percent from the same month in 2007.
The second largest industry category, restaurant and bars, was down 21 percent in December.
City Manager Steve Barwick said, based on information given to him by various business owners, the first two weeks of December were unusually soft. The forced evacuation of the downtown core on New Year’s Eve as a result of Jim Blanning’s bomb scare also contributed to December’s poor showing.
City financiers and elected officials have been eagerly awaiting December’s figures because they use them as a barometer for estimating future months’ sale tax collections. December sales tax revenue accounts for 15 percent of the city’s annual retail sales. March is another big generator in consumption taxes.
Barwick said he expected December to be low, by as much 15 to 18 percent.
“People’s crystal balls have broken,” he said of his underestimation.
Industries that are heavily dependent on local-oriented sales have performed better than others, including food and drug stores, general retail and utilities. Collectively, those industries represent about 28 percent of the city’s total annual taxable retail sales.
Aspen’s portion of Pitkin County’s 3.5 percent sales tax for November 2008 were down 10.1 percent from 2007, and year-to-date collections through November were up 1.8 percent from 2007.
The only bright spot in the report is the Real Estate Transfer Tax, which is up considerably. The RETT funds the affordable-housing program and the Wheeler Opera House.
RETT collections in January were $741,978 and are 81 percent ahead of collections from 2008. So far, the housing RETT is 77 percent ahead of 2009 budget projections.
Wheeler RETT collections in January were $390,819 and are 76 percent ahead of collections from 2008. The tax is 72 percent ahead of 2009 budget projections.
Finance director Don Taylor said the increases are likely a result of sales that have closed on The Residences at the Little Nell. However, he warned, the Aspen real estate market is in peril.
“It would appear that Aspen is feeling the effects of a declining national economy and recession,” Taylor wrote in his report. “We will continue to monitor the effects on our local economic condition.”
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Data — even for those who love to crunch the numbers — is only one part of the teacher retention story at Aspen School District.