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| The City of Durango’s Central Business District, seen here Wednesday, has been key in recent gains in sales tax revenues. According to the city’s Monthly Snapshot Financial Management Report, sales tax revenues are up 13.4 percent over this time last year and lodger’s tax revenues are up 14 percent./Photo by Page Buono |
Add it up
Tax revenue boost puts Durango in the driver’s seat
by Tracy Chamberlin
Things are looking up on the bottom line. With sales and lodger’s tax revenues on the rise, Durango is starting out 2013 in the black.
Things are looking up on the bottom line. With sales and lodger’s tax revenues on the rise, Durango is starting out 2013 in the black.
“It’s great to start the year off strong and hopefully we can keep that up,” said Durango Finance Director Julie Brown.
Sales tax revenues are up 13.4 percent over this time last year and lodger’s tax revenues are up 14 percent, according to the city’s Monthly Snapshot Financial Management Report.
The February numbers come from the January receipts and, according to Brown, “January is usually one of the slower months.”
So, an uptick in the receipt totals is a sign of recovery.
The sales tax revenues are the greatest contributor to the city’s general fund and have been on the rise for the past couple years. This year is shaping up to be no exception.
The sales tax revenues are the greatest contributor to the city’s general fund and have been on the rise for the past couple years. This year is shaping up to be no exception.
The city’s expecting a 2.5 percent increase in sales tax for 2013, helping to fund the annual budget. With the year starting off on 6.5 percent increase, Durango’s on the right track. “It’s an excellent start,” Brown said.
For five months in 2011, the city tallied more than $1 million in sales tax revenues. In 2012, nine months saw that kind of revenue and ended the year up 5.7 percent.
The contributions in February that add up to the 13.4 percent increase in sales tax revenues come mostly from grocery, drug and department stores. In second place are restaurants and taverns.
Almost three-quarters of those hail from two sources: the Central Business District, which includes downtown, and southern Durango, which encompasses Bodo Park and Wal-Mart.
Another tax trend on the upswing is the lodger’s tax. The numbers show the city collected 1.9 percent more in 2011 than in 2010. Last year it jumped another 6.3 percent. This year, it’s already up 8 percent for the year.
Tourism brings in outside dollars to then circulate through the local economy. Since lodger’s tax revenues are “significantly affected by changes in the national and local economies,” according to city officials, it signals a positive start to 2013.
The lodger’s tax adds 2 percent to the total bill for lodging, and an increase in the balance sheet means more people are staying at Durango hotels and motels.
In a town where tourism is fast becoming the No. 1 source of income for residents, a 14 percent increase over February 2012 numbers “is huge for the hotels,” Brown said.
Currently, more than a quarter of the jobs in La Plata County fall under the flag of tourism, according to a report put out by the Region 9 Economic Development District of Southwest Colorado. The annual “snapshot,” which was released last week, breaks down demographic and economic trends in the area.
In Archuleta County, which includes Pagosa Springs and Wolf Creek ski area, the number of tourist-related jobs jumps to 30 percent. San Juan County, which encompasses Silverton, depends the most on visitors with more than 50 percent of employment in tourism.
The nonprofit Region 9, serving Archuleta, Dolores, La Plata, Montezuma and San Juan counties and the Southern Ute and the Ute Mountain Ute Indian tribes, touts itself as a “partnership that promotes and coordinates economic development efforts throughout Southwest Colorado,” according to their website.
One of the economic trends they discovered in La Plata County is its continued move away from “traditional West” commodities, like minerals, cattle and timber, and into tourism as the No. 1 industry.
Brown said the summer months are the biggest months for tourism in Durango, so to see the tax revenues up 14 percent is a sign that the economy is recovering – even in the slow months.
And it’s not the only sign. Building permits are also on the rise with requests and revenues going up over the past year. In 2011, Durango took in just $180,000 in building permit revenues. This year, the city is hoping the trend will continue with $275,000 in revenue expected for the 2013 budget.
“That is our prediction,” Brown said. “As the economy comes back, people start building.”
The one tax number that’s off trend for February is use tax, which declined by 25 percent compared to 2012.
Brown said use tax typically fluctuates throughout the year. These revenues depend greatly on what local businesses are doing, from paying the tax on a building permit for a remodel to upgrading office equipment.
Brown said use tax typically fluctuates throughout the year. These revenues depend greatly on what local businesses are doing, from paying the tax on a building permit for a remodel to upgrading office equipment.
Another source of use tax is vehicle purchases, which can also seesaw. Last month, use tax revenues were up 83 percent over January 2012.
Sunny days and shorter nights signal the changing seasons for Durango. It also signals the start of Durango’s high time – the tourism season. With the revenues on the rise, this year could be a bright spot for Durango’s bottom line.
Sunny days and shorter nights signal the changing seasons for Durango. It also signals the start of Durango’s high time – the tourism season. With the revenues on the rise, this year could be a bright spot for Durango’s bottom line.
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