Steamboat projecting modest growth in sales tax for 2018
August 5, 2017
As city of Steamboat Springs officials sit down to begin crafting a 2018 budget, the city is projecting sales tax revenue will continue to grow by about 3 percent next year.
But a few City Council members think even a 3-percent projection is too much at a time the overall growth rate has been slowing.
"I'm really concerned with the slowing trajectory we're seeing," Councilwoman Kathi Meyer said last month. "It's a lot easier to add (money back to the budget)" than to cut it later.
Meyer said she'd be more comfortable with the city projecting it would collect 0 to 2 percent more in sales tax than it ends up collecting this year.
The majority of the council was fine with the 3-percent projection.
The figure will become more important in the fall, when the council weighs in on a budget.
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The city primarily depends on the sales tax revenue, meaning the projection guides everything from personnel decisions to capital improvement projects.
So far this year, the city has collected $12 million in sales tax revenue, an increase of 3.51 percent as compared to last year's total at the same date.
Finance director Kim Weber came up with the 3-percent growth projection for next year after examining several economic indicators.
In a presentation to the council, she said the indicators point to continued growth in 2018, but a recession might be looming.
City officials have historically taken a conservative approach to the sales tax projection each year.
Last year, the city collected 45 percent of its sales tax revenue in the winter months, 33 percent in the summer and 22 percent in the shoulder seasons.
But during the past five years, summer has seen more growth in revenue than winter.
Overall, the proportion of sales tax per industry has stayed stable in recent years, with retail sales, including groceries, providing 46 to 47 percent of the total and lodging accounting for 18 percent.
It is the city's current policy to budget to spend 95 percent of its sales tax budget, with the rest going into reserves for the year.
To reach Scott Franz, call 970-871-4210, email scottfranz@SteamboatToday.com or follow him on Twitter @ScottFranz10.