Eagle County ends 2020 with better than anticipated sales tax revenues
One year ago, like people all over the globe, Eagle County Finance Director Jill Klosterman was working from home.
She had to convert a closet into an office and from that cloistered space, she worked up some concerning numbers. Because they didn’t know what would happen as a result of the COVID-19 pandemic, county officials forecast for a 15% drop in sales tax revenues. Fortunately, those predictions turned out to be overly grim.
Because there is a several-month lapse before the county receives final sales tax numbers from the state, the verdict for 2020 revenues has only recently been finalized. Klosterman said the state report held good news for Eagle County.
“2020 was down just over $300,000 from 2019, which is less than 2 percent,” Klosterman said. “That was excellent news compared to what I was forecasting in April 2020. I would have guessed things would be significantly worst than that.”
“We were really preparing for the worst,” she added. “We didn’t know what our summer would look like with tourism. And throughout the year we were concerned about what the ski season would look like.”
In 2020, the county’s 1% sales tax generated $17.9 million compared to $18.2 million in 2019. The final figures were actually $400,000 higher than the amended budget the county prepared after the pandemic hit.
“We are viewing our better than budgeted performance as something that is really exciting,” Klosterman said.
Here are some of the 2020 county sales tax highlights:
- In 2019, sales tax revenue was $18.2 million, 6% over the 2019 amended budget of $17.2 million.
- Through December 2020, sales tax revenue was $17.9 million, 2% over budget of $17.5 million.
- In the month of December 2020, sales tax revenue of $2.3 million was 8% ($190k) lower than the same month in 2019.
- Through December 2020, Avon, Basalt, Eagle, Gypsum, Minturn and Unincorporated Eagle County saw sales tax collections higher than through the same months in 2019. Red Cliff and Vail were lower than in 2019.
Shopping from home
While there isn’t hard data from the state, Klosterman believes the 2018 Wayfair decision played a big role in the county’s 2020 sales tax figures. In the 2018 Wayfair ruling, the United States Supreme Court stated that online retailers must collect local sales tax on purchases.
The county’s sales tax figures seem to support the idea that online shopping picked up during the pandemic. “We know there is a lot of leakage out from our local retailers,” Klosterman said.
While the county’s sales tax figures have been stronger than anticipated, the organization did move proactively to cut back spending when COVID-19 hit. Klosterman noted that several employees accepted early retirement offers and some county positions were not filled when people voluntarily left.
“We are now talking about those staffing needs — positions that weren’t filled in the 2020 cycle,” Klosterman said.
During the pandemic, the county opted to provide assistance to both residents and businesses through local grant programs. At the time when those dollars were allocated, local officials didn’t know if the county would ultimately have to absorb the cost. Since then, those dollars have been reimbursed from federal funds. More COVID-19 federal assistance is on the way in 2021 though the American Rescue Act.
“We are hopeful we can tackle some of the big projects in our strategic priorities plan,” Klosterman said. Prospective projects include new segments of the Eagle Valley Trail and design work on future road improvements, she said.
Marijuana and tobacco
The county’s marijuana and tobacco sales tax figures for 2020 also outperformed budget predictions.
In 2019, the county’s marijuana tax generated roughly $658,000. In 2020, the marijuana tax generated $773,000. That figure was 29% higher than the county’s budget projection.
The county’s tobacco tax was approved by the voters in 2019 and collections began in 2020. The tax generated $1.96 million last year, 96% more than the $1 million budget projection.
More details regarding Eagle County’s 2020 sales tax report can be viewed here.