Basalt sales tax revenues slide 22 percent in September
BASALT – The best thing that can be said about Basalt’s summer from a business stand-point is it’s over.
Sales tax revenues fell 22.3 percent in September compared to the prior year, according to a report by town Finance Director Judi Tippetts. The decline made it a clean sweep for the summer months – Basalt’s busiest season. Sales tax collec-tions fell by double digits for all four months. The loss was 17 percent in June, 24 percent in July and 11.7 percent in August.
The performance of individual busi-nesses can be better or worse than the overall total. Some restaurants have reported a decent summer, for example.
Basalt’s declines are in line with what other towns and cities in the Roaring Fork Valley experienced. Aspen was down between 10 and 24 percent for each month of the year until September, when sales were off just 8 percent compared to last year.
In Basalt, sales tax collections were down 13.6 percent for the fiscal year-to-date, from December through September, Tip-petts’ report shows. A total of $2.8 million has been collected by the town so far this year, compared to $3.24 million last year.
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The biggest shock for town officials this year has been the sagging performance of retail food stores, including the City Mar-ket grocery store. Retail food sales are down 4 percent from last year. That’s a big deal for the town because the category accounts for 57 percent of sales tax rev-enues, according to Tippetts’ report.
Basalt Town Manager Bill Kane said the drop in retail food sales reflects an appar-ent decrease in the number of people in the Roaring Fork Valley, particularly con-struction workers. Short-term workers have sought work elsewhere after big projects ended or were cut short.
“There’s just fewer people shopping, fewer people circulating in the economy,” Kane said.
Sales by general retail stores are down 28 percent, year-to-date. Restaurants with bars showed declines in sales of 20.3 per-cent. The numbers likely would have been worse without a homegrown stimulus pro-gram which awarded shoppers with a coupon for spending locally.
The sales tax report showed that beer, wine and spirits as well as sporting goods were among the most popular items for locals to purchase. Liquor store sales are down only 4.5 percent for the year, while sporting goods stores are off about 6 per-cent. Those declines are as good as it gets in this economy.
Tippetts said she anticipates sales tax revenues will be down about 15 percent by the end of the fiscal year. The town had budgeted a 7.5 percent increase for 2009 and felt that was conservative.
The town anticipates sales tax collec-tions will be flat in 2010 compared to this year. “Nobody really knows. That’s just our best guess,” Kane said.
Basalt’s sales tax revenues were respectable in the first quarter of 2009 because of a “wind-down effect” with the economy, according to Kane. It took a while after the financial collapse in Octo-ber and November before reduced spend-ing really hit businesses. Therefore, he expects sales tax collections could drop further in the first quarter, then start to lev-el off in the second quarter.