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Craig — City and county sales taxes took what local officials called a “major drop” in September, darkening hopes that the holiday season will buoy revenue.

According to city records, sales tax returns in September were about $42,500 less than budgeted for the month, or 10.1 percent down.

September also was the fifth consecutive month where the city brought in less sales tax dollars than the same month in 2008 and was the worst drop this year.

September 2009 was about 17.2 percent less than September 2008. August, the second highest drop from year to year, was about 14.1 percent less in 2009 than 2008.

With the sales tax decline, the city still is $13,669 ahead of its budget for the year, or about 1 percent.

September also showed the largest budget shortfall this year for Moffat County, with sales tax revenue about $50,000 less than budgeted, or roughly 20 percent below.

Year to date, county records show it is $93,660 below what was budgeted for sales tax collections, or about 4.9 percent.

Although the county has not met its projections, Budget Analyst Tinneal Gerber said officials have not had to make spending cuts because other revenue streams — federal mineral lease and severance tax dollars on energy activity — came in higher than expected.

The city of Craig depends on sales taxes to make up a significant portion of its general fund, while the county bases its budget on property taxes.

However, both estimate what monthly sales tax returns will be throughout each year and depend on that revenue to continue certain services.

Sales tax also is generally considered a leading economic indicator because it is a direct account of whether people are spending money.

With the shortfall, neither Gerber nor city Finance Director Bruce Nelson were very optimistic about the local economy’s immediate future.

Late fall and the holidays generally are the biggest sales tax months for the city and county because of hunting season and people buying gifts or food.

September is traditionally the beginning of that up tick, Gerber said, but came in this year as a significant decline.

“I’ve heard, too, that most people haven’t seen that many hunters in the last few weeks, either,” Gerber said. “I think we’ll continue to see that (decline) through the end of the year.”

Gerber and Nelson said they plan to be cautious with next year’s budgets, too, and likely will recommend to the county and city, respectively, that officials plan for more declining revenue in 2010.