If current sales-tax revenue trends continue, it’s likely to be a rough winter. But city officials believe the future is brighter for ski-town economies.
Many hoped positive news from Wall Street would make the coming season an improvement over last. It’s now becoming apparent that even though consumers were nervous last autumn, they cut expenditures to a greater degree this fall. However, Bret Howser, budget officer for Park City, believes those same national indicators may be motivating more skiers to plan ski vacations.
According to the Utah State Tax Commission, Park City’s sales tax revenues for the 2008-2009 winter were down 18 percent from the previous winter. That’s no surprise due to the start of the recession, and year-to-year comparisons have been discouraging ever since.
But the nation became aware of the recession last September, which was not reflected in that month’s revenue for Summit County’s unincorporated areas (it was actually up 3.8 percent from the previous year). The ensuing uneasiness was reflected in October’s and November’s numbers that were down four and five percent respectively.
Even though many experts said the economy bottomed before October 2009, sales tax revenue for the unincorporated areas was down 10 percent that month. As of then, the county reported the percentage of its budget it anticipated receiving by that time was behind 13 percent; partly prompting a recent announcement the county would lay off four people.
While October is only one month, and a poor month at that to project revenues for ski season, state figures also suggest purchases are lagging behind predictions.
The tax commission’s revenue summary for the first four months of fiscal year 2010 that began in July reveal a five percent decline in revenue was expected, but the actual drop was over 14 percent.
The most recent year-to-year comparisons from the state reveal that revenue was down 9.5 percent from 2008 during the first quarter, and 10.5 percent during the second quarter of 2009. The second quarter was also down over 1.7 percent from the previous three months, which doesn’t sound like much, but equates to almost $182,692,000.
For all of Summit County, the first quarter was down over 22 percent and the second quarter was down over 16 percent.
The mean average percentage drop in revenue for unincorporated county during the first 10 months of 2009 was 14 percent, according to documents prepared by Matt Leavitt in the county auditor’s office.
Even though these numbers are for six months ago, they’ve been striking fear in organizations that rely on state funding. In late October at a Park City Chamber/Bureau event Utah Office of Tourism director Leigh von der Esch told attendees she was worried about the upcoming session of the Legislature and would be working to just hold onto the same level of funding, which had already been reduced after a budget shortfall was discovered in late 2008.
Howser said his most recent figures put Park City’s sales tax figures as down 11.5 percent.
But that’s only for July, August and September months that don’t contribute greatly to the overall city budget.
“We do expect it to change,” he said.
Sales-tax revenue is tightly connected to booked visitor nights, and ski towns across the West are predicting a better winter than last, he said.
“We’re seeing a higher, or at least equal, demand from last year. The resorts are starting to see the same thing,” he said. “If the current direction continues, it may even see improvement on last year.”
He said the city hasn’t seen the fruits of a turnaround yet, but they’re expecting ski towns to recover faster than originally thought.