May’s sales taxes offer hope that local economy is improving
DILLON — Sales tax reports for the month of May in Summit County have offered a bit of hope to the towns amid the COVID-19 pandemic and economic downturn. While March sales tax reports were grim, April reports showed declining sales tax revenue, but not quite so dramatically. This trend continues in May as Frisco, Dillon and Blue River saw less than 10% decreases in May sales tax revenue, which is an improvement from March for most towns.
Although Breckenridge saw a 44% decline in revenue in May, the decline was about 21 percentage points less than April’s decline of about 65%. As the towns open, some are optimistic that financials will improve while others have their eye on another potential shutdown.
Silverthorne saw its first increase in sales tax revenue in May 2020 compared to 2019 since the start of the pandemic. Prior to May, only January showed an increase in sales tax for 2020 compared to 2019. May 2020 saw a 2.48% increase in sales tax revenue compared to May 2019, while April saw a 14.36% decline and March saw a 24.46% decline. By category, services, online retail and consumer retail saw increases in revenue with service sales tax revenue increasing by a whopping 204.1%. However, some categories still suffered with lodging down 96.54% and the outlets down about 68%. Lodging wasn’t permitted until June due to the public health order.
At the Silverthorne town council meeting last week on July 22, Laura Kennedy, director of finance, said that the town’s financial position is better than expected given the circumstances of COVID-19. She pointed out that while town sales taxes are still down significantly compared to the prior year, about 11%, the downturn is not as severe as other county municipalities.
“The overall expectation is for revenues to be down 20% from 2019 and so if we continue on this track we should be in a better place than that by the end of the year, but we’re just going to have to keep a close eye on it because at any point it may be another shutdown and we don’t know if or when that will happen but clearly some high revenue months are going to be more disastrous than others,” Kennedy said.
“If we could stick with that 11% down I’d probably take that deal right now but I’m concerned that the winter is going to be quite a bit different,” Town Manager Ryan Hyland said.
May year-to-date sales taxes in Frisco are down 8.49% compared to 2019, which amounts to $344,439. The month of May shows sales taxes down 2.57%. The town’s finance report, which will be published in the Aug. 11 town council packet, calls May a slight improvement over the previous month as 11 categories — as opposed to 12 categories — showed declines in May 2020 compared to May 2019.
“Any improvement is great to see,” the report stated. “The highest increases in terms of dollars compared to May of 2019 were exhibited in the grocery, liquor, and retail. Signs of an economy that is at least maintaining during this slump. It is no surprise that lodging and restaurants continue to be our biggest declining categories. It is staff’s hope that with lodging restrictions lifted and a promenade being put up in June will help turn these categories around.”
Frisco’s lodging tax numbers year-to-date through May are down 23.29% and for the month of May, lodging taxes are down 31.53%. The town report noted that May is typically one of the two least profitable months for sales tax revenue and that as the town reopens staff is confident the town will “weather the pandemic.”
Breckenridge is looking at about a 44% downturn in sales taxes for the month of May. According to the finance report in the town council packet for the July 28 meeting, sales tax is currently $2.2 million under the year-to-date budget and $2.3 million behind the prior year. When looking at each industry category for the month of May, all six categories showed declines from May 2019 with the restaurant/bar category down about 79% and the short-term lodging category down about 94%. May net taxable sales fell behind May 2019 by 44.06%, which staff attributed to townwide business closures.
“Expenditures are generally holding the line, with most general fund departments tracking slightly below YTD budgeted expense amount,” the executive summary of the financial report said.
Year-to-date through May, Dillon’s sales taxes were down 2.58%. For the month of May, the downturn amounts to about 5%. Lodging taxes are down about 8% year-to-date through May and 99.25% for the month of May, which is the biggest lodging downturn month for the town so far in 2020.
Blue River saw a 4% decrease in sales tax revenue for May 2020 compared to May 2019, but year-to-date sales taxes are 40% ahead of 2019. Blue River Town Manager and Clerk Michelle Eddy attributes the increased sales tax revenue to online sales. Lodging taxes in Blue River are down 67% for the month of May and 30% down year-to-date.
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