Another strong month for sales tax collections is in the book for Grand Junction, as monthly sales and use tax revenue exceed budget projections by $1 million.
The city has now collected $5.1 million in sales and use taxes above its projections through the first seven months of the year.
If this trend continues, Grand Junction Finance Director Jodi Welch said the city will end the year with more than $35 million in its fund balance.
“The categories that are growing show a strong construction industry, which I know we see other signs of that besides just the sales tax revenues, and it’s those places that a majority of people shop, we call it miscellaneous retail or general merchandise, but it’s the Targets, it’s the Sam’s Clubs, it’s the Walmarts,” Welch said. “Growth in those areas indicated consumer confidence.”
While the numbers have been good this year, City Manager Greg Caton cautioned that sales tax collections can vary based on a number of factors. The current positive trend gives city officials confidence, Caton said, but things out of their control could change that.
“Sales taxes are very sensitive to a variety of factors,” Caton said. “For example, over the last three plus weeks, there’s a little concern about Glenwood Canyon and the interstate being closed.”
It’s too early to tell what kind of an effect that has had on the city’s sales tax. Caton said officials have heard from the business community that there has been an impact.
To combat the closure, Caton said they shifted their marketing strategy.
“What we did is pivot our marketing efforts on the leisure traveler side to folks who are coming from the west or from another direction other than the east,” Caton said.
While there are concerns, the city is on track to end the year with a significant fund balance that could be used on one-time capital expenses.
Caton said he isn’t recommending spending down the fund balance in a significant way.
However, combined with the American Rescue Plan funding — about $11 million coming from the federal government — the city has an opportunity to tackle some needed projects.
“Our revenue streams are strong enough as they are that we believe we can fulfill 2022 capital needs and 2022 operational needs,” Caton said. “Our fund balance will increase. I think what we have is an opportunity, in addition to American Rescue Plan Act dollars, is to see if there’s a significant project or opportunity or need in our community that needs to be addressed.”
Projects in the city’s capital plan could be moved up or expanded, Caton said.
Overall, he said the latest sales tax figures continue to show that the city is in good shape economically.
“I think that we just continue to see strong economic activity, and this is one measure of that,” Caton said. “Also the planning activity continues to be very robust. So some of this is not a surprise to us because that is the leading indicator, particularly on the construction side.”
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August 16, 2021 at 01:15PM
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