Craig, Moffat County hit with sales tax declines in 2009
February 10, 2010
Story at a glance
■ Craig, Moffat County sales taxes down 6.42 and 7.22 percent, respectively, in 2009
■ December’s drop continues eight straight months of declining sales tax returns for city
■ Craig sees $64,796.43 budget shortfall for 2009
■ Moffat County sees $189,194.03 budget shortfall for 2009
■ City officials consider drop “not a drastic change”
The city of Craig experienced one of its biggest sales tax declines of 2009 in December, according to figures.
Sales tax in Craig was down 15.59 percent for the month compared to December 2008.
That's the second steepest drop since September 2009's 16.75 percent decrease.
For 2009, Craig sales tax decreased by 6.42 percent from 2008, totaling $237,383 less in city coffers. The city budgeted for a 4.67 percent decrease.
Sales tax, considered by many economists to be a good measuring stick for the economy, shows consumer activity throughout the community.
Craig's December figures gave the city eight straight months of declining sales tax returns in 2009. The city hasn't had an increase since April 2009, according to figures.
Since August 2009, the city has had an average loss of 12.29 percent in sales tax.
That decline, mixed with a small increase earlier in 2009, leaves the city short 1.84 percent in its budget, equal to a $64,796.43 shortfall.
"A total 1 percent drop is a fairly flat budget," Chamber of Commerce director Christina Currie said. "I think in this economy, with what is going on on a national scale and in other communities across the state, business are happy to stay flat. … It's not the worst news we could have."
The city isn't panicking, either.
City manager Jim Ferree said he won't be making any drastic changes or cuts because of a one-percent drop, just tightening the city's spending this year, he said.
"It's not that drastic of a change, overall," Ferree said.
Ferree said he is maintaining a "stay the course" attitude.
"We're a labor-intensive organization so most of our costs are associated with salaries and benefits, and we haven't added any new employees," he said. "So we held costs there, and the next place you look is capital outlet … but that's down about a million this year."
The Craig shortfalls in revenue are small compared to that of a neighboring community.
Steamboat Springs experienced a 16.3 percent drop in sales tax in 2009, which equates to $3.2 million.
"The one advantage that we have is that the industries we depend on are fairly secure," Currie said. "Although there are hiring freezes, budget tightening and a little bit of volatility, we haven't seen that in a huge degree in Moffat County."
Sales tax in Moffat County, however, also is declining.
According to year-end statistics, the county is down 7.22 percent from its budget. The shortfall totals $189,194.03.
The county was able to make up the shortfall through increases in severance tax and mineral lease revenue that saw increases in 2009, Moffat County budget analyst Tinneal Gerber said.
For the 2010 budget, accounting for current trends in consumer spending, the county budgeted nearly 10 percent less than the previous year.
"I don't see (sales tax) picking up any time soon," Gerber said. "But we are fine with where those decreases are. We saw that coming and knew that was definitely a possibility."