Sales and lodgers tax numbers for June may look scary, but given what was anticipated at the end of March, when COVID-19 first hit, economic development and community leaders across Durango are finding some relief.
The city of Durango’s Monthly Tax Report for July, based on taxes collected in June, shows sales tax collections at $2.36 million based on a tax rate of 3%, a 4.9% decrease in revenue from June 2019. A 0.5% addition to the sales tax rate, which didn’t take effect until July 2019, brought in another $393,276 to city coffers.
The lodgers tax collection came in at $69,554 for room rentals in June, a 51.4% decrease from June 2019.
“I don’t want to say we’re happy, but really the sales tax hit is less severe than we anticipated,” said Mayor Dean Brookie. “I really want to see July numbers, because it seems to me we really didn’t get going with the summer season until after the Fourth of July.”
In the city’s worst-case scenario, projections had shown sales taxes could have been down as much as 60% a month if businesses had not been allowed to reopen.
Now, with sales tax collections coming in above projections, Brookie said the city can begin analyzing the cuts made earlier this year to see if some can be restored.
About 30 construction and capital improvement projects were deferred or canceled, cutting about $6 million from the budget. Brookie said the city might now be able to restore some of them.
“I can’t say we can bring them all back, that’s certainly not the case, but we can take a look to see if it makes sense to restore some of them,” he said.
Theresa Blake Graven, tourism and communication director with Visit Durango, said the big hit taken by inns in June appears to be moderating in July, and Durango appears to be experiencing a more solid recovery from COVID-19 than bigger cities.
“We have a lodging report that has Durango at 75% occupancy for July. That compares to 35% for Denver, and the U.S. average was 48%,” she said.
While lodgers tax numbers were down 51.4% in June, she said they were down 72.8% for May and down 77.1% for April.
With a number of schools offering remote learning, Blake Graven said the summer season might get a late boost from families who can take late summer and even fall vacations with their children freed from attending classes in person.
“We’re continuing to see an improvement, and I think July and August numbers are going to look very different when we have those in,” she said.
Durango Chamber of Commerce Executive Director Jack Llewellyn said based on his eye test, parking lots at Durango inns appeared fuller in July and August than they were June.
“What I’m hearing is that trips to smaller towns are rebounding more quickly, and that makes sense. People can come and camp, then they can hike and bike and fish without being around a lot of other people,” he said.
The lack of sporting events and concerts in bigger urban areas also might drive vacation visits to smaller towns, he said.
According to calculations by Tim Walsworth, executive director of the Business Improvement District, the Central Business District, downtown Durango, is down 12% in sales year-to-date from 2019.
“We never like to see anything in the red. However, given everything we’ve been through and all the fears that we had, it’s probably fair to say that it’s not as bad as we imagined it might be,” he said.
parmijo@durangoherald.com
