Vail gives first nod to town’s 2021 budget
It’s going to take some time for Vail’s revenues to rebound the crash of 2020.
The town’s sales tax collections — which reflect business activity in town — are expected to decline about 24% from 2019’s collections. That decline hit hardest in March and April, and lingered into the summer. But summer was successful, considering the pandemic circumstances, which led to a bit of good news.
When the pandemic first hit, and the town dropped into its recession budget plans, town officials first budgeted as much as $7.1 million of reserves to cover possible general fund shortfalls. The town instead is spending $1.3 million in reserve funds this year, and expects to spend about $1.3 million in 2021.
According to the most recent budget planning data from Vail Finance Director Kathleen Halloran, the town will still have more than $33 million in reserves at the end of 2021. That represents about 77% of general fund spending.
The town will probably need to tap its reserve funds in the future.
The budget analysis expects the town to lose up to $24 million in revenue between 2020 and 2024. That represents a decline in business activity. The forecast projects revenue in 2021 that’s comparable to collections in 2020, with 10% annual growth in the following years. The forecast calls for a return to 2019 revenue collections by 2024.
In the general fund, which covers most municipal operations, the town expects to spend about $42.2 million in 2021. Spending across all funds is expected to hit $82.3 million, if the town doesn’t cash-fund a project to replace its aging public works facility.
Town officials are likely to finance that facility, putting the town into debt for the first time since 2012.
The Vail Town Council at its Nov. 17 meeting passed the first reading of the budget on a 7-0 vote. Final reading is expected Dec. 3.
By the numbers
$42.2 million: Vail’s 2021 proposed general fund spending.
$82.3 million: Vail’s 2021 proposed spending across all funds.
24%: Decline from 2019 in Vail’s 2020 sales tax collections.
32%: Share of town revenue from sales tax.
Source: Town of Vail