Park City: the biggest loser?
April 14, 2009
A report by Bonneville Research comparing taxable retail sales in January versus the previous year found that aside from Hurricane, Park City was the state’s biggest loser.
The report claims a 23 percent decline in sales or a difference of $23.3 million for Park City in January. That figure excludes sales from food and beverage.
Jon Springmeyer, vice president with Bonneville, said the numbers came directly from the Utah State Tax Commission.
"Given the state of our economy right now, (the figures) show the reality of the economic problems we’re seeing," he said. "All of the cities, especially the largest ones, are seeing a heavy decrease and are going to have to make budget adjustments."
Bret Howser, Park City Municipal Corporation’s budget officer, is well aware of the situation.
Bonneville Research reported taxable sales; Howser’s office has been tracking sales tax.
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He’s expecting a decline of about $3 million for the 2009 fiscal year. Year to date, Park City’s revenue is down 12 percent. the end of the fiscal year in June, he anticipates it to be 16 percent.
In January, all departments were asked to cut their spending by five percent to lessen some of that damage. That and other measures have been effective, he said.
Besides less sales tax, the city is also receiving less revenue from planning, building and engineering fees.
But Howser isn’t panicking. The city has five levels of response planned for a fiscal emergency and the city is only at level two. By moving money around, the city can plug that $3 million hole without residents being affected, he said.
"If we cut the grass at a park three times a week, we may now only cut it twice. I’m not sure anybody will really notice the grass is longer," he said.
Howser also referenced the end of towel service at the Racquet Club as an example of cutbacks.
"If I’m doing my job right, people won’t even notice," he said.
That said, he also warned merchants at the annual Historic Main Street Business Alliance meeting on April 8 that the city in this next fiscal year will be "coming out of the gate in debt."
Projections for 2010 put it at slightly better than 2009, revealing optimism for the local economy. His numbers for 2011 show it returning to levels he originally expected for 2009 before the recession. He doesn’t have any real data, that’s just been the historical trend, he said.
Jeff Ward, president of the Historic Main Street Business Alliance, said he isn’t that surprised by 23 percent.
"Keep in mind last year was a record year. We’re $23 million off from a record year. There was an up tick the year before, and a down tick this year. The result is a big swing," he said. "Intuitively it sounds right."
Ward also argued that the only fair comparison would be other ski towns of the same size. Resort communities have unique local economies, he said.
Howser said all cuts in the coming city budget and raising of fees would go through the city council and time would be allowed for public input.