Sales Tax 202105

Town sales tax revenues through May 2021

Town treasurer Michelle Stoke presented a budget report including April’s town tax numbers at the June 22 Buena Vista trustees meeting.

The report showed 46.8% increase in local tax revenues compared with April 2020 and a 37.1% increase in total taxes collected in 2021 compared with January to April of last year.

Local sales taxes collected by the town amounted to $166,359 this past April, up from $129,854 in the same month last year. Remote taxes rose from $34,144 in April 2020 to $55,437 in April 2021.

The figures for the month of May, to be presented at the next trustee meeting July 27, show this trend continued.

So far, tax revenue growth is far outpacing the town’s budget prediction of 3%. Year-to-date tax revenues stood at 33% over budget as of April.

“May wasn’t quite as hearty as April was, so that’s knocked about a half a percent off there,” said Stoke. “The dollar increase over budget is currently at $416,000.”

Sales taxes provided over two thirds of the general funds for government activities in 2020.

Stoke’s budget report also noted, “Sales taxes are an indicator of the level of general economic activity in the community, which is dependent upon the influx of visitors throughout the year, but especially during the summer months.”

Despite closures, sales taxes collected in BV were higher for every month of the year in 2020 over 2019. This fits a wider pattern of Rocky Mountain communities being insulated from national economic downturns.

“Even during the recession of 2008 we had substantial growth,” said Stoke.

Do the current numbers reflect expected growth given strong tourism numbers and indications of population increases, compounded by COVID-19 rebound?

“There’s a lot of built-up rebound kind of like a bow and arrow. You’re holding it for so long and you finally let it go. So there is a rebound. That’s why Wednesday is the new Friday as far as traffic in BV goes. There’s a lot of people here,” she said.

Stoke said the generation of sales tax in BV over the past 10 years has been intimately connected to the state prison, housing construction and summer tourism as three interrelated financial pillars.

“An increased demand on housing inventory resulting from urban flight has resulted in a severe shortage in affordable housing. This shortage has had a negative impact on the state prison and tourist-related businesses as new employees are frequently commuting from other communities that have more affordable housing available,” the June 22 report said.

“If the housing issue can be addressed quickly, there is a likelihood that retirees and young professionals will continue to relocate to Buena Vista to enjoy the recreational amenities and temperate weather.”

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