City looks at potential surplus

Sales tax revenues higher than projected for 2007, trend expected to continue

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— There might be some grounded proof to the optimism emanating from Craig City Hall.

Sales tax numbers are up, and that's a good indicator the local economy is not only healthy, but, as City Hall projects, it's growing.

The figures through August show Craig has at least 8 percent more than what the city budgeted for in sales tax revenue to this point. That means a surplus for 2008 if the revenue stays constant.

"City and county revenue is on an upward climb," said Bruce Nelson, city finance director. "It's been kind of stale for a while, but now it's taking off."

Sales tax generally is one of the better barometers for economic growth, Nelson said.

"It is a good indicator because it shows that people are spending," Nelson said. "The only problem is whether it's short-term or long-term."

Temporary workers can unnaturally spike sales, setting up the area for a fall when they leave.

"People may come in, and the revenue increases because there's more people spending, and then they leave and it dries up," Nelson said.

Moffat County could experience such a fall if migrant energy workers prove to be the catalyst for the increase.

Nelson attributes economic growth to the energy boom, but said the industry is not hurting and should prove to be fairly stable.

Unlike big construction projects in the past, when oil and gas wells are finished, the companies still require workers to maintain them.

More than that, well construction in Northwest Colorado most likely will not slow down unless there are legislative issues or an unforeseen national or international situation that slows the energy industry.

Still, Nelson reiterated, there is almost no way to tell when the growth will reach its zenith.

This year has been better than anticipated, however.

Compared to last year, sales tax revenue is up about 14.2 percent. A month-to-month comparison reveals the difference.

June was the best month, coming in more than 24 percent higher in 2007 than in 2006. February took a minor 0.11 percent step back from 2006.

Normally, the city sees, and budgets for, big sales tax numbers in the fall, during hunting season. The large number of tourists spending money at sporting shops, outfitters, retailers and restaurants can almost always be counted on, Nelson said.

This year, the city is riding high going into hunting season, mostly because a pipeline from Wyoming to Rio Blanco County moved more than oil and gas, he added.

"There have been a lot of workers coming through the county because of that pipeline," Nelson said.

Those workers probably are responsible for most of the extra revenue through the middle of 2007, Nelson said. They set the city up for an unusual, and welcome, state of affairs.

With Wal-Mart planning to open next week, the rest of the year and beyond looks good, which is important for the city, Nelson added.

Sales tax provides almost 50 percent of the city's general fund, which pays for its employees, operations and capital projects.

"The trend looks like we'll continue to get it," Nelson said.

Collin Smith can be reached at 824-7031, ext. 209, or cesmith@craigdailypress.com

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