June sales tax figures down in Breckenridge
BRECKENRIDGE – Breckenridge sales tax revenues took another hit in June, prompting council members to make plans to discuss the issue at its Sept. 23 meeting.
By then, July sales tax revenues will be tabulated, giving council members a better idea how to approach next year’s budget.
Short-term lodging took the biggest hit in June, with revenue down almost 25 percent over June 2002 and 11.7 percent down year to date.
That could be the result of discounts lodging entities offered, because Breckenridge Resort Chamber numbers indicate lodging numbers were better than that.
“If you’re offering discounted lodging, you might not be generating as much profit,” said Town Manager Tim Gagen. “In turn, that affects the dollars we collect.”
Restaurants and bars were down 13.6 percent for the month and 3.2 percent year to date. And the tourism sector – restaurants, bars, retail and lodging combined – was down 13.3 percent for the month and 8.8 percent year to date. Overall, the town is 4 percent off its projections.
“It’s the same old story,” said Mayor Sam Mamula of the financial report. “But it’s a little worse.”
July’s revenues, which will be returned from the state next month, will be a better predictor as to how the town fared over the summer.
“June didn’t mess up our (budget’s) assumptions; we kind of held our own,” Gagen said. “But July could. July’s going to be critical.”
Many retailers, restaurateurs and lodging company representatives have been in awe of the throngs of people on the streets – but disappointed that they’re not opening their wallets and spending money.
“I’m hearing a mixed bag,” Gagen said. “Some people are saying it’s their best summer ever, others are saying they’re not seeing anything at all.”
According to Breckenridge Ski Resort Chief Operations Officer Roger McCarthy, conference business is way off, and that’s affecting other businesses, including the golf course.
Revenue there was down about $50,000 through June, but that rebounded in July, bringing golf course revenue to about $25,000 below projections.
Town officials now hope to extend the season a little longer, and golf officials are working with lodging entities to bring more groups to town.
But everything hinges on July, Gagen said, and he’s hearing mixed reactions from merchants, restaurateurs and others regarding how well it went.
“When you’re down in April, May, June, it’s not as bad as being down in July, December, January,” Gagen said. “Based on our current revenue, we have to plan for a drop of 4 percent (in the 2004 budget). If we’re starting to see a trend upward, we can be more optimistic about how we project revenues.”
The town council already has “frozen” $300,000 in approved expenditures this year, including travel, consultants, training and overtime. If revenues don’t increase, Gagen said, it’s possible those freezes could become more draconian.
“What’s more worrisome, is how do we handle next year’s budget?” Gagen said. “Our largest chunk of expenditures is personnel, and we’ve asked more and more things from our personnel without giving them any increases. That stretching of the rubber band can only go so far. We might have some tough decisions to make.”
Based on current revenue streams, the town council realizes it will have to cut the 2004 budget by 4 percent.
Compared to other mountain towns, which are reporting overall budget shortfalls of up to 6 percent, Breckenridge is doing rather well.
“We’ll weather this well,” he said. “We’ll just have to do a lot of things to manage the budget well.”
Gagen said he’s not sure what the rest of the year will bring to Breckenridge.
“Groups are the key indicator,” he said. “Groups spend money, they eat out. When they’re here, you usually feel better that the economy’s turning around. But I’m not hearing anything good about groups for this summer.”
Winter group sales are looking better, however. And events have proven popular.
“We are successful in getting them here,” Gagen said. “One challenge we face is making it a good experience so they open up their wallets and spend money.”
Jane Stebbins can be reached at (970) 668-3998, ext. 228, or email@example.com.
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