Eagle County’s sales tax receipts are strong, but big test comes in December | VailDaily.com

Eagle County’s sales tax receipts are strong, but big test comes in December

Summer collections were above 2019 figures, but ski season provides area with its big sales tax months

This graph from Eagle County shows that sales tax collections in unincorporated areas and in various municipalities have held strong through the COVID-19 pandemic. But a big test of the local economy will happen in December.
Special to the Daily

Eagle County sales tax revenues in the days of COVID-19 continue to defy expectations, but local officials note the real test of that good news is still on the horizon.

According to Eagle County Finance Director Jill Klosterman, county sales tax collections in September of 2020 were almost 12.5% higher than collections in September of 2019.

The county isn’t alone in that experience. Through September 2020 the towns of Avon, Basalt, Eagle, Gypsum and Minturn also saw sales tax collections higher than through the same months in 2019. Only Red Cliff and Vail were lower than 2019 collections.

In the big picture, Klosterman said strong collections through the summer and fall months have meant overall county sales tax revenues are just 1% below 2019 figures.

“But included in that number is January and February receipts, when our ski season was operating and nobody really knew how COVID would affect us,” Klosterman said.

“The summer was great and we are happy to see those numbers,” she continued. “But it takes a lot of summers to earn the amount we earn in a winter. I think that it is important for everyone to remember our biggest sales tax months are always during ski season.”

Big unknown

As Klosterman noted, back in January, COVID-19 was a distant threat. By February it was a looming concern. By March, it was a local reality.

Klosterman noted that at the end of February, the county’s sales tax revenues were 8% above 2019 collections.

“January and February were $2 million (in sales tax collections) months. March would have been another $2 million month but we were down about 40%,” she said. “We have only really incurred about a half of month of big impact.”

While it is absolutely accurate to report that overall the county’s sales tax numbers are only down 1% year to date during the global pandemic, Klosterman warned that statistic doesn’t reflect the big question ahead: What’s going to happen during the traditionally strong collection months of November and December of 2020 leading into the winter months of 2021?

“We just don’t know what our ski season will look like,” she said.

 Looking ahead

Local governments are now in the thick of budget planning for 2021 and there are obviously plenty of unknowns for 2021. In Eagle County, Klosterman is planning for a 15% reduction in revenues from 2019 levels. That reflects a sizeable decline for January through March receipts that then levels off for the remainder of the year.

“We will revisit that in May when the January, February and March numbers are in,” Klosterman said.

But before that, Klosterman is anxiously awaiting sales tax data from the upcoming holiday season.

“December will be a big test for the resiliency of our local economy,” she said.

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