Eagle learns 2017 sales taxes are up, but not as high as the town budgeted
August 23, 2017
EAGLE — Eagle's sales tax revenues for the first half of 2017 are up — that's the good news.
But those revenues have not increased as much as the town budgeted, which could necessitate year-end budget cuts.
In formulating Eagle's 2017 budget, former town manager John Schneiger and town finance director Jill Ewing anticipated an 8 percent increase in sales tax revenues during 2017. They based that figure on recent history — sales tax collections grew 11.5 percent in 2016 and 11.2 percent in 2015. Additionally, state forecasts called for a 5 percent sales tax growth. Ewing noted this week that she initially proposed a 5 percent increase for the 2017 budget but Schneiger supported the 8 percent figure, and that was reflected in the budget approved by the Eagle Town Board.
However, to date, Eagle's sales tax increase has been only 3.5 percent. To hit the budget figures, sales tax collections will need to increase 11.5 percent higher than 2016 for the last five months of 2017. If sales tax revenue remains flat for the last five months, then Eagle will have to make up a $182,775 shortfall. If sale tax revenues continue to grow at 3.5 percent for the last five months, then there will be a $127,370 budget shortfall.
At this point in the year, Eagle has collected approximately 56 percent of its total sales tax for the year. While the total increase has not hit anticipated levels, Ewing noted that the most recent collections have seen big jumps. The last two months, collections were up 15 percent and 11 percent, respectively. She added that the last five months of the year traditionally see higher sales tax collections than the earlier months of the year.
two commercial zones
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The Market Street and Chambers Avenue business areas are the only two commercial zones in Eagle that reported sales tax increases so far in 2017. Market Street is home to Eagle's largest sales tax generator — City Market.
The figures to date show a 15.68 percent increase in Market Street sales tax revenue. The Chambers Avenue increase is 13.89 percent.
But Eagle's downtown sales tax receipts are down 15.83 percent, while Eagle Ranch is down 2.82 percent and Grand Avenue is down 1.45 percent.
During a Tuesday night meeting discussion of the sales tax figures, Eagle Town Board member Paul Witt asked what caused the big drop in downtown collections.
"We are taking some big hits there," he said.
Eagle Town Clerk Jenny Rakow said that at least one business hasn't yet paid what is owed, which accounted for some of the drop.
"We will get paid, so that will adjust," she said.
Rakow said the state of Colorado is responsible for collecting the sales tax revenues and then sending Eagle its share.
"They are remarkably proactive about it," she said.
With Market Street leading the town's neighborhood sales tax receipts, its not surprising that food sales collections are up in 2017. Food sales tax growth is 10 percent year-to-date and totals nearly $300,000.
Other categories that have seen increases are building materials (up 39 percent, $83,888), liquor sales (up 12.49 percent, $55,143), automotive (up 16.78 percent, $25,846) and lodging ( up 7.85 percent, $64,375).
Retail sales tax collection is down 6.38 percent for a total collection of $178,924, and bar and restaurant collection is down 1.2 percent for a total collection of $175,555. Other dropping categories include utilities (down 5.69 percent, $106,948) and miscellaneous (down 14.84 percent, $49,126).
Town board members noted they will continue to closely monitor sales tax reports over the next five months to determine if budget changes are necessary.