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Attachment #1

2020 Sales Tax Projection


July 23, 2019

Kim Weber, Finance Director


Financial Policies
• Sales tax revenue will be budgeted by the Finance Director
utilizing a conservative approach with a combination of the
following mechanisms:
• Prior year trends and current year revenue collections.
• Economic outlook for global, national, and local markets.
• Analyzing the split between local and tourist sales tax dollars and the factors
influencing each.
Global & National Economy
• GDP - decrease slightly in the US, but increase world-wide
• Unemployment continues to stay low
• Inflation expected to remain steady
• Federal interest rate expected to decrease
• Consumer confidence remains strong
• Fueled by a robust labor market
• Especially higher in households earning $100,000+
• Disposable income continues to steadily increase
Local Economy
• Low Unemployment
• Increasing salaries/wages
• Building Permits in Steamboat Springs (Jan-Jun 2019 vs. Jan-Jun 2018)
• Permits down by 7%
• Number of units up by 37%
• Total Fees down by 35%
• Valuation down by 37%
• Stable to strong retail sales
• Stable to strong lodging
Sales Tax - Mountain Communities
• Steamboat Springs
• Year-to-date collections through May 31, 2019 = 7.55% above 2018 YTD.
• General Fund = 5.2% above 2018 YTD (approximately $550K)
• SSRA = 84% above 2018 YTD (approximately $267K)
• Other Mtn. Communities as of April 30th
• Breckenridge 6.11%
• Frisco 7.09%
• Glenwood Springs 6.75%
• Telluride 21.09%

• Other Mtn. Communities as of May 31st


• Snowmass Village 15.07%
• Aspen 6.45%
• Vail 5.98%
• Winter Park 5.34%
Based on most recent information from municipalities .
Year-over-year Sales Tax Increase by Location

Taxing Area YOY % Increase Jan - May


Downtown 2.30%
Mountain 11.6%
Hwy 40 Corridor 1.88%
Regional 18.34%
West Steamboat 6.79%
Total 7.55%
Seasonal sales tax information
• Winter (Dec, Jan, Feb, Mar) 46% of annual sales tax
• Summer (Jun-Sep) 32% of annual sales tax
• Shoulder (Apr, May, Oct, Nov) 22% of annual sales tax

• 5 year change 2014-2018


• Winter 28% increase
• Summer 25% increase
• Shoulder 28% increase
Percent of City Sales Tax Collected by Season

Season 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018


Winter (Dec – Mar) 46% 46% 45% 45% 46%
Summer (Jun – Sept) 32% 32% 33% 33% 32%
Shoulder (Apr/May/Oct/Nov) 22% 22% 22% 22% 22%
City Sales Tax by Category
2014 2015 2016 2017 2018
Category % of Sales Tax % of Sales Tax % of Sales Tax % of Sales % of Sales
Tax Tax

Misc. Retail 46% 45% 45% 19% 20%


Grocery Stores (Included in Misc. Retail) (Included in Misc. Retail) (Included in Misc. Retail) 15% 15%

Home Improvement (Included in Misc. Retail) (Included in Misc. Retail) (Included in Misc. Retail) 11% 11%

Marijuana (Included in Misc. Retail) 2% 2% 2% 2%


Lodging 17% 17% 18% 18% 18%
Restaurants 17% 17% 17% 17% 17%
Utilities 9% 8% 8% 8% 7%
Sporting Goods 7% 7% 6% 6% 6%
Liquor Stores 4% 4% 4% 4% 4%
Sales Tax by Industry 5-year Change
• 5-year change (2014 to 2018)
• Lodging 34%
• Restaurants 28%
• Liquor Stores 20%
• Misc. Retail 22%
• Utilities 9%
• Sporting Goods 12%
2020 Sales Tax Budget
• 4% Increase from 2019 projected sales tax collections
• 2019 Sales tax revenues for the General Fund are currently 5.2%
above 2018 (net of SSRA)
• Projecting ending the year with 5% increase over 2018
• We have collected about 40% of our sales tax for the year.
• Estimating about a 4.5 - 5% monthly increase for the rest of the year.
• The projection will be revised as we receive each month’s taxes until October.
Historical Trend
Sales Tax Revenue 1977-2020
2019 Projected 2020 Budget
$30,000,000 4%
5%

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$-

Year
Year-over-year Summary
City Wide Increase from SSRA Portion General Fund Increase
Sales Tax Prior Year Sales Tax (City-wide less from Prior
Year (4%) SSRA) Year
2018 Actual $25,998,035 6.2% ($699,945) $25,298,090 5.8%
2019 Projected $27,572,565 6% ($986,604) $26,585,961 5%
2020 Budget $28,675,468 4% ($1,026,068) $27,649,400 4%

Estimated proposed
2020 budget
Questions?