Local sales and use tax revenue drops 4.1% in December

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GRAND JUNCTION, Colo. (KKCO) - Sales and use taxes are the largest source of operating revenues for the city of Grand Junction. Recent reports show the collections were down 4.1% in December from the previous year.

"Business has not been as good as what it could have been the last couple of years," says Toys for the Fun of It owner Mike Allen. "We're looking for a little bit of recovery. I've been doing this long enough to understand Western Colorado comes out of it a little bit slower than the rest of the country or maybe even the state."

The recession, the political scene, many factors have played into the significant decline in business.

"It's a little bit of a cautionary tale to see that they were down from the year before," says Diane Schwenke, Grand Junction Chamber of Commerce CEO. "I think we were all hoping that we had bottomed out, and we were actually on the climb out of the recession."

The city actually expected a 3% increase in sales tax revenue, so this drop has a significant impact.

"I would urge people to think twice before they buy online," said Mike, "because when you do purchase [in store], I don't get to keep that sales tax dollars. The city gets that, and that's what pays for fire, road, construction."

Unfortunately the story has not changed this year.

"Sales have been down here too," said Mike. "January and February were off a little bit from last year. It was really cold, nobody wanted to get out."

"It's really an uncertain time for businesses and uncertain times for consumers," said Diane. "I think that might be contributing to a drop in sales overall that we're seeing."

Could this be the new normal? Experts say only time will tell.

"A lot of the economists that I'm hearing from are saying that it looks like the end of the year is going to be better than the beginning of the year," said Diane, "but it is something that is concerning at least in the short term."

But businesses are keeping their heads up.

"The store's stocked. Downtown's looking great," said Mike. "We're looking forward to a wonderful spring and summer."

The city's sales tax is currently 2.75%. More than 4,300 vendors are licensed to collect this tax through business transactions.

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