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City sales taxes down in June, but not as much as feared

Lodgers tax took a bigger hit during 416 Fire
Sales taxes for June, the month of the 416 Fire, came in at $2.22 million for the city of Durango, down 5.6 percent compared with June 2017.

City of Durango sales tax revenue collected for the month of June came in at $2.22 million, down 5.6 percent from the same month in 2017 – a relief to some the drop wasn’t bigger given the 416 Fire started June 1.

“It was down, but it was better than I expected. I thought it might be down 10 or 12 percent,” said Durango Chamber of Commerce Director Jack Llewellyn.

Llewellyn credited locals who kept their shopping dollars in town during the month to cushion Durango’s merchants from taking too big a hit from fewer tourists.

City Manager Ron LeBlanc also said the drop was less substantial than he had anticipated.

“It will be interesting to see the July numbers. That will tell me how much the fire really impacted us this summer,” he said.

By comparison, Silverton, which is more dependent on the Durango & Silverton Narrow Gauge Railroad’s summer runs, reported sales tax collections of $99,552 for June, a 24 percent drop for the month compared with June 2017.

For the year through June, Durango has collected $13.48 million in sales taxes – up 2.1 percent from 2017.

In the city’s monthly reports, sales tax revenue collected in June is recorded in July. The June numbers were made public last week.

The lodgers tax took a bigger hit. The collected amount for June was $125,498, down 13.2 percent compared with $144,637 in June 2017.

Frank Lockwood, executive director of the Durango Area Tourism Office, said even with the large drop in lodgers tax collections for June, the total revenue collected from lodgers for the year, $483,481, is down only 0.7 percent.

“It’s only anecdotal, but hotel people around town have told me a lot of cancellations in June rescheduled for July,” he said.

Word got out quickly on the internet in July that the fire was no longer a threat, and that helped July bookings – a big difference from the Missionary Ridge Fire in 2002, when the internet was not as prevalent, Lockwood said.

In addition, Lockwood said the Downtown Welcome Center recorded more than 18,000 walk-ins in July, a record.

“That lets me know people were in town for the month of July,” he said. “I’m fairly confident we’re going to get a bounce back in July. I just don’t know how much of a bounce back we’ll get.”

Sales taxes collected at restaurants and taverns came in at $293,867 for June 2018 compared with $301,682 for June 2017. Sales taxes collected at hotels and motels came in at $195,326 for June 2018 compared with $225,089 for June 2017.

During the Missionary Ridge Fire, LeBlanc said the city experienced four consecutive months of declining sales tax numbers before numbers revived.

Sales tax declines in the first month of the 2002 Missionary Ridge Fire were bad, LeBlanc said. The second month was even worse, but the third and the fourth months, while still recording declines, saw better numbers.

LeBlanc said he is working with city department heads to identify about $1.2 million in trims from the current budget that he estimates will be needed because of lost sales tax collections from the fire.

The only street repair project planned for 2018 has been canceled, generating a savings of $650,000, about half of the savings the city will have to find, LeBlanc said.

“I’ve asked the department heads to dig in and see if they can do without,” he said. “Just because something’s in the budget doesn’t mean we have to buy it.”

parmjo@durangoherald.com

Oct 18, 2021
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