Routt County sales tax revenue has continued to rise this year, with the latest year-end projections showing the county will have collected about 40% more than expected.
Sales tax revenue has historically increased about 5% per year, according to county chief financial officer Dan Strnad. But since the start of the pandemic, these revenues have not ceased to surprise.
The $11.2 million expected to arrive this year represents an increase of about 50% in sales taxes collected in 2019, and Strnad expects the county to collect 17% more in sales taxes this year than in 2021.
Strnad said the increase comes from a variety of products, from accommodation and food costs largely paid for by visitors to home improvement materials typically purchased by locals. Even products like alcohol and marijuana are still seeing growth in terms of sales tax collected.
“It’s all of the above,” Strnad said. “We have a lot of people here.”
These projections are based on the sales tax the county collected through July, which means they could still change before the end of the year. Strnad said the state of Colorado physically collects taxes and then remits them to the county, which is why there is a reporting backlog.
Between January and June, sales tax revenues were on average 49% higher than budgeted. In July, the surplus was smaller, although it still increased by around 31%. Strnad said he used that 31% to estimate the rest of the year and would adjust his projection as new data comes out.
August data is expected to be released this week, Strnad said. August is typically the third-highest sales tax collection month, behind December and March, Strnad said.
The county’s other revenues are also up.
Strnad predicts that the building use tax, collected on the basis of building permits, has increased by nearly $480,000, or 30% more than budgeted. Automobile use taxes paid on the purchase of a car have increased by approximately $350,000 or 58% over what was budgeted.
Although a smaller total, even motor vehicle expenses increased by about 20%, resulting in an $80,000 increase in county coffers. Each of these fees has also increased significantly over the past year.
However, not all revenues are up. The interest projections the county is accumulating have taken a hit this year as the Federal Reserve continues to raise rates, which Strnad says lowers the value of the bonds the county had at the lowest rate. On the balance sheet, it represents a loss of approximately $1 million, although this loss would only manifest itself if the county sold the securities it owns.
“We still have to recognize these things as a loss, even though we’re not going to sell any of them,” Strnad said.
Overall, the county expects to raise about $2.8 million more this year than budgeted, or an additional 8%.
Looking to next year, revenue is expected to be approximately 9% higher than forecast for this year, an increase of $3.8 million. Revenue is projected at $41.7 million for 2023, compared to a current projection of $40.7 million this year.
Routt County Commissioners will hear a similar presentation again next week as they work to craft the 2023 budget. The county’s budget can fluctuate significantly from year to year – largely depending on capital expenditures such as road improvements – but it averages between $40 and $45 million.
To reach Dylan Anderson, call 970-871-4247 or email danderson@SteamboatPilot.com.
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