Earlier this week, Estes Park released the September 2021 Sales Tax Revenue report and the numbers are consistent with what the town has been experiencing all year: record setting collections.
“Sales taxes continue to reflect strong economic activity, with tax collections for Sept. 2021 exceeding Sept. 2020 by 15 percent and Sept. 2019 by 29 percent,” said Estes Park Finance Director Duane Hudson. “The collections include double returns for a 13 month filer but even after removing the second return for the month, collections still exceeded 2019 by almost 22 percent.”
Compared to 2020, collections for Sept. in restaurants were up 20 percent, up in retail 30 percent, and up in professional services 29 percent.
“Delinquencies were only a minor portion of the Sept. collections, totaling $70,966 or only 2.6 percent of Sept. collections,” Hudson said.
Total collections for Sept. 2021 were $2,657,744, and year-to-date collections are at $16,429,975 through the first three quarters of the year, up 38.29 percent from year-to-date collections through the same time last year.
The taxable sales tables reflect taxable sales in the month of the sale, regardless of when remitted.
“Even after the resulting removal of the variances for delinquencies in these two tables, taxable sales continue to reflect strong economic growth,” Hudson said. “The 80517 zip code table reflects a year to date increase of 38 percent over 2020’s taxable sales and 18 percent over 2019’s actual.”
Year-to-date taxable sales for restaurants are up 45 percent over 2020 and 19 percent over 2019. Retail is up 26 percent over 2019 and the lodging sector reflects a year-to-date increase of 20 percent over 2019.
“[This year] continues to be a record setting year and we are three-quarters of the way through the year,” said Hudson. “It will be interesting to see how the final quarter performs.”
One factor that might be playing a role — how big of a role is unknown – in increased sales tax collections are increased prices for goods and services across all industries.
Mary Smithson of Mary Jane’s boutique in Estes Park says the only way for a business to survive is for the consumer to share in some of the increased costs of owning and operating a business during the pandemic.
“We absolutely are having to pass on price increases. Nearly every one of my vendors has given me a price increase this year and some have given me a price increase and a shipping surcharge,” said Smithson. “Our packaging prices — gift boxes, shopping bags, etc. — have almost doubled when you factor in the higher shipping costs.”
Smithson says she has never experienced so many price increases in a single year and that it’s been a nightmare for her entire staff to just keep up with the ever increasing prices and delays.
“We are trying to hold our prices where ever possible, but in many cases, we are having to pass the increases onto the consumer,” Smithson said. “Every time I open an email from a vendor, I fear it will contain another price increase or a delay in shipment due to the container or trucking shortage. This has been an incredibly challenging year.”
All that said, Smithson does not think price increases have played a major role on the increased sales tax. The overall price increases in her store have been approx. five percent so she believes anything over a five percent increase in tax revenues would likely be attributed to increased spending by locals and guests.
“I believe that overall, most people just have more disposable income right now and pent-up demand,” Smithson said. “They are finally getting out and spending the money that they saved while not travelling and eating out as much the previous year.”
Smithson believes that the challenge has been more on the retailer than the consumer during the pandemic, as they have had to balance staying afloat and keeping customers through price increases.
“We don’t want to increase our prices, so we are struggling to hold them as much as possible, but I find consumers are not as worried about it in my stores … yet,” Smithson said. “They are starting to notice and comment on price increases in gas and groceries, but the luxuries they are slower to realize because they don’t buy those things every day. It will be interesting to see what happens after the holidays, into 2022, if people still have the same disposable income to spend.”
President of Thirty Below Leather, Scott Walker says he had to raise his prices due to a number of factors raising the cost of doing business.
“Without a doubt [I had to raise prices]. With shipping costs escalating exponentially, as well as cost of goods for the same reason, prices can go up or businesses can close,” said Walker. “Not much of a choice.”
Patti Aldridge of Creativity Cabin has also had to increase prices due to COVID-related supply issues and shipping costs.
“And I will likely have to do it again,” Aldridge said. “My supplier costs are increasing about 20 percent related to shipping mostly. I have also had increased revenue related in increased traffic as I am a new business.”
Charley Dickey of Rustic Mountain Charm is feeling the impacts of rising business costs as well.
“We absolutely saw price increases on almost every product in the form of item increases, additional fees on invoices, and increased cost of freight,” said Dickey. “Additionally, there have been some utility costs. In order to stay solvent, we of course had to adjust our customer pricing. Yes, inflation is real and long term.”
Owner of StoneBrook on Fall River, Teresa Commerford detailed a long list of factors that contributed to her having to increase prices.
- “Competition for labor and lack of workers, this increased roughly 20 percent.
- Supplies have increased in cost significantly, due to supply chain issues, higher cost of substitutes.
- Projected inflation rate.
- Wildfires increased insurance costs 25 percent.
- Gov. Jared Polis’ cost of sick leave added to labor costs.
- Unemployment insurance rates increased 10 percent.
- Bedding and other costs increased with higher demand, including pest control, as we have shorter stays, more used bleach wipes ruining colored towels, etc.
- Electric rate increased, gas doubled.”
Even if the final quarter of sales tax collections return to normal levels, it is likely the town will have a record year in revenue.