Basalt sales tax revenues take a dive in October
Just when Basalt government’s top staff officials were counting on strong sales tax growth to end the year, a mysterious thing happened — grocery sales plummeted in October.
Sales tax revenue was so strong the prior nine months that Basalt officials planned for 5 percent growth for the fourth quarter of this year.
“Just when we get comfortable with that, we got (October’s) sales tax and we were actually down 10 percent month over month last year,” Town Manager Ryan Mahoney said Wednesday.
Whole Foods and City Market led retail food sales, but it includes sales by smaller convenience stores and the like. Total retail food sales were down 26.32 percent in October compared with the same month last year, according to the latest report by the town government.
The town collected $170,374 in taxes from retail food outlets in October this year compared with $231,247 for the month in 2016. Sales tax collected in October reflects actual sales in September.
It was the lowest amount of retail food sales for October since 2013, the first full year Whole Foods was open at Willits Town Center.
Mahoney said the staff couldn’t explain the steep drop in grocery sales. It does not appear there is any anomaly such as delayed tax payments by one of the large grocers, he said.
The grocery stores, both chains, previously said company policy prohibits them from discussing sales.
Grocery stores’ sales tax revenuee has been money in the bank for Basalt for decades. Grocery sales account for about 40 percent of the town’s annual sales tax collections.
For the Basalt economy as a whole, sales tax collections were down 9.67 percent in October.
Sales tax revenue was cruising along so well in 2017 that the town staff decided to plan for a 5 percent increase in the fourth quarter over last year.
The October performance was one of extremes. Sales tax revenue from lodges was down 39.4 percent but restaurants with bars surged 30.25 percent.
General retail sales were up 18.3 percent but retail sporting goods sales were down 3.3 percent. Building materials sales were down 2.2 percent. Retail liquor outlets brewed up 34.8 percent growth.
Even with a poor October, Basalt’s business community is still registering a strong year. Sales tax revenue year-to-date through October was up 6.25 percent over last year’s record pace. The town has collected $4.38 million in sales tax revenue through October this year compared with $4.12 million last year.
And even with the poor October, grocery stores are still up 1.21 percent in sales for the year.
Mahoney said he and Judi Tippetts, assistant town manager and finance director, still believe the town can count on an increase in sales tax revenue for 2018.
“What we’re showing for the 2018 budget is a 4 percent increase over what we estimate to be this year’s revenue,” Mahoney told the Town Council at a recent meeting.
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