Dillon finance director Mary Kay Perrotti told the Dillon Town Council Tuesday that sales tax revenue in 2025 through March was down 8.27%, or $233,000, compared to the same timeframe in 2024. Projections based on that data predict the town will be down 13%, or $1.1 million, in sales tax this year compared to the 2025 budget.

Perrotti spoke at the council’s work session during a “recession planning exercise,” laying out six items budgeted to receive money from the capital fund this year that the town could delay to 2026 or later.

“Staff is recommending this list of deferred capital projects to prepare for the worst case scenario that we will be approximately 13% down as compared to budget, or 1.1 million,” Perrotti said.

Dillon had the largest dip in sales tax among Summit County municipalities this ski season, down 6% from December to March as compared to the season before. In April, Perrotti presented $700,000 worth of potential capital deferrals, including a police department facility analysis, replacement marina docks, town park design work and the town park plaza.

The additional deferrals Perrotti presented Tuesday total $405,000, meaning altogether the deferrals remove $1.1 million from the 2025 capital fund expenses, matching the projected sales tax shortfall.

The second round of deferrals include $100,000 for town hall safety improvements; $40,000 for recreation path resurfacing; $65,000 for disc golf course improvements; $50,000 for cemetery entry landscaping; $50,000 for surface maintenance projects; and $100,000 for miscellaneous equipment for events, which Perrotti said is “really more of a contingency.”

Perrotti said staff hopes the sales tax numbers will improve throughout the summer, with the town hosting more events like its farmers market and amphitheater concerts, and through the rest of the year.

“We are being very conservative in light of the economic environment,” Perrotti said. “People just, you know, they’re being more conservative with their disposable income. This is a proposal that is worst case. We can keep evaluating this month to month to see how we close the gap.”

If sales tax revenue does improve throughout the year, the town could bring back these projects in 2025, although many of the ones now deferred would be unlikely to return because they are summer projects, Perrotti said.

“I think, like the (police station) analysis and the design stuff could pretty quickly get, you know, go whenever,” Mayor Carolyn Skowyra said. “It’s too bad because those aren’t my top priorities for what I’d want to add back in.”

Perrotti said the sales tax numbers for April showed the town is “closing the gap a little bit, which is good news.” Compared to 2024, April’s sales tax revenue was up 5.74%, or $31,000. She said staff thinks the increase was because Easter was later than usual this year.

In year-to-date through April sales tax, the town is down $202,000, closing the gap by 2.25% compared to the $233,000 it was down through March.

Lodging tax revenue is projected to be close to its budget estimation, something Perrotti said was interesting, given voter-approved tax increases on short-term rentals were expected to discourage their use.

“We’re seeing a little bit of a reversal,” Perrotti said. “We’re thinking that some of the short-term rentals, some of the numbers there, are because people want to stay in a short-term rental to cook and to avoid the costs of staying in a hotel — going out to eat — or maybe to keep things more within their budget.”

Deferring capital projects has historically been the preferred strategy of the Town Council, as opposed to cutting spending from the general fund, Perrotti said.

“If things turn even worse, then we might have to look at making cuts in the general fund,” Perrotti said. “But that has not been the philosophy, per my understanding, in the past.”

Town manager Nathan Johnson wrote in an email to Summit Daily News that the projects Perrotti discussed are now “deferred/put on hold.”

“We will continue to analyze our revenue situation and report back to Council as the year moves on,” Johnson wrote.