Summit County economy falters in 2002
SUMMIT COUNTY – In light of the decline in national and local economies, less-than-stellar news about 2002 county sales tax revenues should come as no surprise. With the exception of Dillon, the towns and the county all saw a drop in sales tax revenue collections in 2002.
Thankfully, however, the decrease in local construction – the industry that impacts so many of the county’s businesses – appears to be stabilizing. That could point to less-volatile economic times ahead.
Summit County issued 443 building permits in 2002 and 474 in 2001, according to Larry Renfroe, director of the county’s building inspection department. That’s not a significant decrease, Renfroe said, particularly when compared to the number of permits issued in 2000. In that comparably bustling building year, the county issued 580 permits.
“I think (building permits have) stabilized at this level,” Renfroe said. “I would consider this (2002) building permit activity paralleling the ’01 season.”
But the towns and the county didn’t enjoy such stability.
Dillon’s sales tax revenues were up a meager 1 percent, but town officials say it’s an increase they’re happy to have. Dillon had the fortune to see what some other entities didn’t – retail growth. Bed, Bath and Beyond, Maxwell Street Grill, Mattress King and Complete Family Eye Care all opened in Dillon Ridge Marketplace in either late 2001 or 2002. Reebok also came online at the Dillon Factory Stores.
By contrast, neighboring Silverthorne saw its sales tax revenues plummet by almost 6 percent in 2002 – the most dramatic decrease countywide.
“Business was just generally down,” said finance director Donna Braun. “But December didn’t look too bad. That’s giving us some optimism.”
In Silverthorne, 2002 saw a more than 9 percent drop in retail sales tax revenues. That includes many of the building-related businesses, but not the factory stores.
Sales tax collected at the Silverthorne Factory Stores in 2002 also took a significant dip, falling by more than 8 percent. The reason? The poor economy and the vacant store sites that dot the factory stores complex.
The factory stores contribute about one-third of the town’s annual sales tax revenues, so finance director Donna Braun said that decrease is definitely a concern for the town.
Collections in Frisco fell by more than 2 percent, but town spokeswoman Linda Lichtendahl said the town was able to absorb the loss with minimal pain.
“It’s not great news, but I guess it could have been worse,” she said. “We were able to hold expenses, so we actually ended out the year OK.”
The greatest losses in Frisco showed up in the lodging industry, where sales tax revenues fell by 13 percent. Retail tourism, which includes ski shops, the marina and other tourist-related businesses, dropped 7 percent.
In Breckenridge, the 4.8 decrease in sales tax revenues was countered by an increase in real estate transfer tax collections. The transfer tax is a 1 percent fee collected by the town on almost all real estate sales.
“We’re still in fine financial condition because the real estate transfer tax well exceeded budgeted projections,” said finance director Judy Ferris.
Transfer tax collections came in at more than $3 million; the town had expected to collect $1.7 million.
As in Silverthorne, the hardest-hit businesses in Breckenridge during 2002 were those related to the construction industry.
Summit County, which collects the bulk of its sales tax from ski resorts Keystone and Copper Mountain, took in 4 percent less in 2002 than in 2001.
“People just weren’t spending money up here,” said the county’s finance director, Linda Gregory. “Resort spending is so discretionary. People are tightening their belts and holding back.”
Gregory said she’s optimistic about 2003, banking on the resorts’ Front Range tourist draw.
“It seems like it was a pretty good Christmas,” she said. “We’re probably getting a lot of the tourists that might have gone overseas. People are kind of sticking close to home.”
Jane Reuter can be reached at (970) 668-3998, ext. 229, or by e-mail at firstname.lastname@example.org.
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