Vail real estate, sales taxes strong, but downturn budgeted for coming year
Vail, CO Colorado
VAIL, Colorado ” Despite a slowing economy, Vail’s still set records in 2008 in real estate and sales tax collections.
The town’s finance department released more details Wednesday on the town’s revenue collection, showing that last year was still a positive economic year for the town.
However, the town does expect a decrease in sales tax collections for 2009, and the Vail Town Council will discus revising the town’s budget at its Feb. 17 meeting.
Real-estate taxes strong
The town collected a record $9 million in real estate transfer taxes, a 1 percent charge for any sale of a property.
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The 2008 collections surpassed the previous record set in 2007 of $6.5 million by 38 percent and exceeded the town’s budget projections, said Kathleen Halloran, the town’s manager of budgets and financial reporting.
Much of that increase was due to major redevelopment projects, including the Arrabelle, the Chalets at the Lodge at Vail, Forest Place, Manor Vail, One Willow Bridge Road, Vail Plaza Hotel and the Willows.
However, Halloran said the town can’t expect the same for 2009.
Taxes collected from unrelated to major redevelopment projects dropped by 38 percent in 2008 compared with 2007, and the overall real estate market in Eagle County was down 27 percent in sales dollars as of last November.
In anticipation of a slowdown in redevelopment activity, the town has set the real estate revenue budget down 31 percent from the 2008 collections.
Snow pushes sales taxes
Vail also set a record for sales tax collections, which are the town’s largest single revenue source.
The four-percent tax saw record collections until September, when the numbers started to decrease. However, the abundance of snow and strong spring season still resulted in a nearly 4 percent increase from 2007 in sales tax collections.
Much of that increase in sales taxes was driven by Lionshead, which saw a 42 percent growth in from food locations, a nearly 26 percent increase in retail stores and nearly 8 percent increase from lodging.
Vail Village lodging saw a 6 percent increase in sales taxes, while retail stores saw a 11.4 percent decrease. Restaurants also saw a 2.6 percent decrease. The town projects that sales taxes for 2009 will be about $19.4 million, down slightly from 2008.
Construction revenue slows
Revenue from construction permit fees, however, was down for 2008 and is expected to dip even lower for the coming year.
2008 collections were down 14 percent from 2007, and the revenue for the coming year is estimated to be 62 percent lower than 2008, Halloran said.
The town attributes the decrease to many major redevelopments finishing up and fewer new projects coming up.
Last year was also the first year Vail collected a voter-approved, four-percent construction-use tax. The tax generated $613,283, and the town predicts it will collect about $1 million from the tax for 2009. However, the town is considering decreasing that amount.
Parking and property taxes
Vail sold less seasonal parking passes in 2008, but earned more from daily parking sales for a total of $4.7 million, a 5.5 percent increase from 2007.
Most of that is from the increase in daily parking rates for the 2008-09 winter season. The town expects to collect about $5.7 million in parking revenue for 2009, a 20 percent increase from 2008 based on the current demand and the higher rates.
Property tax collections totaled $4.1 million for 2008, with the same amount expected for 2009. However, property owners will see a .289 levy increase in addition to the town’s base property tax rate of 4.69 mills this year.
The increase, or abatement levy, allows the town to collect revenue that it lost due to property tax appeals. In 2008, town council did use the abatement levy option.