Record marijuana sales in March help Steamboat weather potential sales tax storm
STEAMBOAT SPRINGS — It appears the city of Steamboat Springs has financially survived a winter tourism season that some believed was threatened because of winter’s late arrival.
“I think it’s a pleasant surprise,” City Manager Gary Suiter said. “We depend on the snow.”
Record marijuana sales in March helped contribute to financial success with the city collecting $2.9 million in total sales tax revenue, which is 3.5 percent more than in March 2017.
The city depends on sales tax revenue to fund about 70 percent of government operations, and on Tuesday, the city revealed how March fared. March revenues represent about 12 percent of the city’s total annual collections.
When combined with sales tax collections from January and February, the city is 6.27 percent ahead of where it was in 2017.
“I was pleasantly surprised with January and February,” Suiter said.
City Finance Director Kim Weber agreed.
“I think February was a bigger question mark for me, and it exceeded what my expectations were,” Weber said.
Revenue was up 8.7 percent in January and 6.7 percent in February.
Suiter said he believed Steamboat’s winter tourism season was salvaged, in part, because Steamboat had better snow than many other parts of Colorado.
“This year, the snow seemed to be pushed north,” Suiter said.
While contributing to only 2 percent of the city’s annual sales tax collections, the local marijuana industry continued to help pad the city’s coffers.
Steamboat’s three marijuana businesses again saw record marijuana sales in March of $1.3 million. The city’s 4 percent sales tax cut of that was $52,692.
Suiter cautioned the city should not rely on marijuana sales tax revenues.
“In the long run more and more cities and states are legalizing recreational marijuana, and over time, I think the revenue pie is going to dilute,” Suiter said.
Suiter said he was curious to find out what sales tax collections were from April. Steamboat Ski Area closed for the season April 15.
“It seemed like there were a lot of people here,” Suiter said. “It’s just hard to get a barometer on that and people’s spending patterns.”
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