Crested Butte real estate tax collections off the chart
By Mark Reaman
Based on summer tax revenues that have been compiled in Crested Butte and Gunnison County, some business sectors are doing really well even in a pandemic, while others are struggling with the coronavirus restrictions.
Crested Butte finance director Rob Zillioux said this week that preliminary August sales tax revenue was down only about 1 percent from 2019. For the year, sales tax revenue is off by about 6 percent. Meanwhile the Real Estate Transfer Tax (RETT) has already blown by what was projected to be collected for the entire year.
“Being down 1 percent in August is not great, but it is certainly not horrible,” Zillioux said. “For a ‘ski town,’ we are doing pretty good. Lots and lots of open space and great outdoor activities have offset much of what could have been a very bad year due to COVID. Additionally, Gunnison County [Joni Reynolds, et al.] got us to a relatively “safe” place where folks felt comfortable to visit. In terms of sales tax collections, we are doing better than places like Aspen, Telluride and Vail, but not as good as places like Fruita and Grand Junction, who also have wide open spaces and lots of outdoor activities.”
When the pandemic started, Zillioux had modeled various scenarios with reduced sales tax collections. In April, his optimistic model predicted a 25 percent decrease in sales tax revenue, with the worst case being that the town would collect less than half of what it did last year. Even at that level he said Crested Butte’s healthy reserves along with budget cuts implemented in the spring would get the town through the year in good stead.
“Lodging has done well the last couple of months,” Zillioux reported. “So have groceries and anything associated with outdoor retail. The restaurant and bars are still struggling and as a group are not doing as well as they did a year ago. Some restaurants that embraced the challenge are doing well, whereas others have not. High-touch services, such as gyms and salons, are also hurting.”
According to town figures, lodging revenue increased 14 percent in August but is still down 4 percent year-to-date. Grocery revenue was up 21 percent in August while bars and restaurants were off 4 percent compared to 2019. That category is off 16 percent for the year.
Tourism and Prosperity Partnership executive director John Norton confirmed that lodging revenue in Gunnison County has been doing well all summer. He told the council that July brought in the most lodging revenue to the county for any month in history. It was up nearly 9 percent over 2019 and he postulated that perhaps with lodging, the county could see a new record increase in revenues compared to all previous years.
Norton credited the strong numbers in part to the TAPP marketing strategy of promoting the trails in the area and letting people know there is a lot of open space in the area.
“We continue to be surprised by the amount of sales tax we’re collecting,” said Gunnison County finance director Linda Nienhueser this week. She told the county commissioners on Tuesday that July sales tax revenue was up 2.32 percent over 2019.
Zillioux agreed that places with space were attracting people. He said tax revenues in the Grand Valley have increased over the summer, with Fruita showing a 28 percent increase year-to-date in sales tax collections. “If you’ve been to 18 Road to bike this year you know it looks like a scene out of Mad Max,” he said. “Grand Junction is up 3 percent for the year and Montrose up 4 percent. It seems the communities with lots of outdoor space are doing well. There is a flight by people wanting to get to the outdoors.”
Speaking of flight, Zillioux said the RETT is going gangbusters. The RETT charges a 3 percent tax on real estate transactions in Crested Butte with the money earmarked for open space and capital projects.
He said so far $1.6 million of RETT has been collected in Crested Butte. The town had budgeted to collect $1.4 million in RETT for all of 2020. “There is nothing affordable on the market in town and what is there is sold quickly,” he said. “Free market prices are going up quickly. This is consistent with a lot of the towns like us. People are seeing they can live and work from places like Crested Butte and they are buying property.”