Buffi Harrington, left, and Megan Trujillo ring up a customer at Murdoch's Ranch & Home Supply on Thursday. Sales across the county were higher than expected in December 2008, and local government officials said they were pleased to see the corresponding increase in sales tax revenue.

Photo by Hans Hallgren

Buffi Harrington, left, and Megan Trujillo ring up a customer at Murdoch's Ranch & Home Supply on Thursday. Sales across the county were higher than expected in December 2008, and local government officials said they were pleased to see the corresponding increase in sales tax revenue.

Sales tax returns show growth, but budget officials still are wary

Advertisement

Sales tax returns

City of Craig:

• Budgeted sales tax revenue for 2008: $3,461,700

• Actual sales tax revenue for 2008: $3,698,726.84

• Difference: $237,026.84

• Actual sales tax revenue for December 2007: $363,791.78

• Budgeted sales tax revenue for December 2008: $409,500

• Actual sales tax revenue for December 2008: $398,359.67

• Difference in Actual 2008 vs. Budgeted 2008: -$11,140.33

• Actual percent growth from December 2007 to December 2008: 9.5 percent

Moffat County:

• Budgeted sales tax revenue for 2008: $2,613,908.69

• Actual sales tax revenue for 2008: $2,800,844.33

• Difference: $186,935.64

• Actual sales tax revenue for December 2007: $254,940.53

• Budgeted sales tax revenue for December 2008: $291,971

• Actual sales tax revenue for December 2008: $303,547.19

• Difference in Actual 2008 vs. Budgeted 2008: $11,576.19

• Actual percent growth from December 2007 to December 2008: 19.1 percent

Craig Finance Director Bruce Nelson's eyes didn't light up when the state returned December 2008 sales tax revenue to the city last week, but he was pleasantly surprised.

It seems Craig businesses made a fair amount of sales for the holidays.

The city collected about $398,000 in December 2008 sales taxes - 9.5 percent more than it collected in December 2007.

Local officials have said they were nervous about December sales tax returns because of the national recession.

As an economic indicator, sales tax is a direct representation of consumer spending. If local consumers spend more from one year to the next, or if there are more consumers than before, it can indicate a growing economy.

The city already approved its 2009 budget in November 2008 based on estimates for sales tax revenue for the last four months of the year. A bad December - traditionally the biggest commercial month of every year - could mean budget cuts for the city in 2009.

Revenue in December 2008 was about $11,000 less than budgeted for the month, but the important number for the city is the year-end tally, Nelson said.

Despite December's budget shortfall, 2008 followed the previous two years as another growth year for Craig.

It ended the year with more money than officials budgeted - about $237,000 extra, or 6.9 percent - which Nelson said is always a good thing.

The city also ended the year with about $172,000 more than officials expected to have when they planned the 2009 budget last fall. Nelson said this shows the end of 2008 - which included some of the worst months for the U.S. economy in recent history - did not have as much of an impact on the Craig economy as what originally was feared.

The surplus will go into the city's general fund. The City Council could appropriate it for any purpose, but standard practice would be to hold onto it and include the money in the 2010 budget, Nelson said.

The county budget was in a similar position as the city's, if not more precarious because its sales tax revenue had not been as high as the city's throughout the earlier months of 2008.

However, county sales tax revenue rebounded, as well.

Moffat County brought in about $303,547.19 in December 2008, more than the $291,971 budgeted and the $254,941 earned in December 2007.

County Budget Analyst Tinneal Gerber said that left the county about 6.7 percent, or $186,936, ahead of budget on sales tax revenue for the year. Its surplus will be split between the county general and jail funds.

The numbers also seem to indicate both the Craig and Moffat County economies experienced overall growth from 2007 to 2008.

City sales tax revenue increased about 10.7 percent from 2007 to 2008, while the county came behind that with a 6.1 percent growth.

But officials are not confident the trend will continue.

"Just listen to everything around you right now," Gerber said. "You're unsure of anything financial right now."

Nelson said he budgeted for the city to receive about $170,000 less in 2009 than it collected in 2008 because of the unsteady nature of the national economy.

He added he could not predict what will happen in the future, but he feels confident the city can maintain without budget cuts because of its cautious planning.

"Going forward, even if (tax revenue) drops a little bit, we hope we're going to be OK because we budgeted for a loss," Nelson said.

Gerber said she plans to analyze sales tax returns from the last few months of 2008 to see what may have caused the uptick in local spending.

"That will help us know whether this is something that will continue or if it was a one-time thing," she said, adding that county officials will not get too hopeful about the economy.

"We'll still be very conservative," she said. "It's nice to see that money come in, but we still have to be very careful."

Comments

Use the comment form below to begin a discussion about this content.

Requires free registration

Posting comments requires a free account and verification.