Sales tax still slumps in City of Craig
City budget plans for revenue decline in ’10
December 23, 2009
Craig — City sales tax revenue again was below budget in October, according to the latest figures from local officials.
The state distributes sales taxes to local governments two months after they're collected. Most economists consider sales tax a good barometer of economic activity because it directly represents consumer activity in the community.
Sales taxes also make up a significant portion of the city of Craig's annual revenues for its general fund.
In October, city sales tax revenue totaled about $419,000, roughly 2 percent or $9,000 less than budgeted for the month.
Stagnant consumer activity in Craig has left city sales taxes slightly less than budgeted for the year. To date, city sales tax is $6,384 below budget or 0.23 percent.
The city's share of countywide sales tax is slightly above budget for 2009, sitting at $11,397 or 1 percent more than projected.
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City Manager Jim Ferree said the results have not forced any spending cuts in the 2009 budget but that they have caused officials to be more cautious in expecting the economy to rebound quickly.
For instance, the city's 2010 budget plans for sales tax revenue to regress back to 2007 levels, which is a 4 percent drop from this year.
The reality of sluggish sales also prompted officials to adjust spending priorities next year.
With forecasts of less revenue on the horizon — both in terms of sales tax and intergovernmental grants — Ferree said the city plans to minimize costs in a way similar to what Moffat County officials have planned.
The city's adopted budget cuts many capital expenses in the new year, such as purchasing new equipment or paying for some maintenance projects.
Officials also plan to keep staffing costs to a minimum, Ferree said.
"We haven't added any employees because those are ongoing costs," he said. "We're going to continue to monitor revenues, and hopefully, we won't have to do anything that other communities had to do, like employee furlough days and that stuff."
Ferree added that he hopes the community's large employers — such as the power plant, coal mines and Wal-Mart — can continue to give residents some stability amid the national recession.