Has Eagle sales tax dip bottomed out?
EAGLE, Colorado – Eagle sales tax figures for the first half of 2011 are in, and while the news is far from bright, it is at least less bleak than it has been for a couple of years.
With sales tax totaling about $1.3 million for the first six months of the year, Eagle can report receipts are basically flat for the year. That’s good news compared to the past two years when the town saw sales tax revenues drop by 15 percent.
“The message, hopefully, is that we have bottomed out,” said Eagle Town manager Willy Powell during a presentation of the numbers to the Eagle Town Board.
But that slightly good news is balanced against the grim report that property tax revenues for the town are expected to drop 29 percent. As that relates to the town’s 2012 budget, it won’t be a great year.
“It’s a very, very lean budget for 2012,” said Powell.
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Sales tax revenues are the primary funding source for town operations. In 2009, tax sales receipts dropped by 13 percent from 2008 levels, which were 1 percent lower than 2007 collections. The hardest hit category during the past three years is building materials, which saw a whopping 62 percent decline since 2008. To date in 2010, building materials receipts are down around 6 percent.
The categories that have seen increases in the past six months include auto repairs and parts and food sales. Motel and general retail receipts are generally flat.
As for the areas of town that generate the most sales tax revenue, Market Street is the clear leader at roughly 50 percent. Chambers Avenue businesses contribute around 30 percent, while downtown businesses make up around 8 percent of the town’s sales tax revenues.
With the six-month data in hand, Eagle heads into its 2012 budget season. As sales tax revenue has shrunk, the town’s operations have been down-sized in response. Since 2009, Eagle has cut back from 45.5 employees to 35.5 employees. Powell noted that some of those employees were laid off – particularly in areas where the town’s work load has significantly decreased, such as building inspections. Other cuts have come through attrition, where employees have left their jobs and the town has not filled the positions. However, Powell also noted that in many cases the workload has not diminished and the town must now provide services comparable to what it has done in the past but with fewer employees.