Glenwood sales dip 1.1% in 2008 |

Glenwood sales dip 1.1% in 2008

Pete Fowler
Glenwood Springs correspondent
Aspen, CO Colorado

GLENWOOD SPRINGS ” Taxable sales last year in Glenwood Springs dropped 1.1 percent from 2007’s numbers. Total sales in 2008 hit $441.94 million.

But the 2008 total was still higher than 2006’s total of $402.65 million. The last time city sales tax revenues slipped downward was after Sept. 11, 2001. Sales tax revenues declined 5.57 percent from 2001 to 2004 before starting to climb again in 2005.

December, normally Glenwood’s best month for sales, posted the largest decline by month compared to 2007. December ’08 sales tax revenue was 9.88 percent below December 2007.

“To have that percentage reduction over 2007 in your biggest month of the year is substantial,” said City Manager Jeff Hecksel. “It reflects a trend that is clearly alarming. It’s a negative number, and the magnitude of the negative number is increasing. It’s getting worse, not better.”

Sales tax revenues by month last year started lagging behind 2007 levels in June.

Glenwood’s 3.7 percent sales tax is the largest source of income for the city. Despite declines in the second half of 2008, Hecksel said overall sales tax revenues actually came in 3.37 percent ahead of what was budgeted.

Home furnishing sales took the biggest hit among retail sectors last year ” they were down 13.75 percent in 2008, compared to the prior year. Motel and hotel business was down 2.83 percent, general merchandise sales dropped off by 5.51 percent, and sales of building materials and supplies were down 8.47 percent.

But sales in the apparel and accessories category climbed 13.25 percent. Sales at eating and drinking establishments grew 3.7 percent and grocery receipts climbed 4.93 percent.

Accommodations tax revenue also dropped dramatically in December ” down 19.12 percent from the same month in 2007. The month’s tax revenue also fell below December 2006 levels.

The accommodations tax is seen as an indicator of tourist activity, and it was down 1.77 percent for the year.

Hecksel cited harsh December weather as one factor in the December drop-off. It may have prevented some visitors from getting to Glenwood, he said. Fewer oil and gas workers are probably staying in local motels, he added, since activity has also slowed in that industry.

The Glenwood City Council has approved an $82 million budget for 209 that projects a 2 percent increase in sales tax revenue. The budget was described as a “status quo” plan that didn’t reflect big spending cuts.

Officials said the city has enough cash reserves to carry it through the economic downturn, and that pressing ahead with street improvements and infrastructure projects will take advantage of better construction deals while also plugging money into the local economy.

“While we haven’t changed the budget, I think the expectation is we’re probably not going to see that increase,” Hecksel said.

Hecksel said the City Council has reduced the amount available for city employee pay raises, and the city will be watching to see if further steps are necessary.

Two economists quoted Tuesday by Dow Jones and Company’s MarketWatch said the U.S. will probably endure “at least several more quarters of economic misery” and the unemployment rate won’t reach normal levels for “years.”

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