For the past six years, the Pagosa Springs Town Council has been holding an annual summer ‘retreat’ to settle on their spending and policy priorities for the coming year. This year’s retreat will be held virtually, via Zoom, and the public is invited to observe the discussions.
REMOTE PARTICIPATION
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TOWN COUNCIL STRATEGIC PLANNING RETREAT
- Introduction: Survey Responses Review
- Session 1: Defining Priorities
- Session 2: Ethical & Professional Standards
- Session 3: Finalize Top 10 Priorities with Actions
- Session 4: Development Discussion
- Session 5: Review Next Steps
The basic intent of the annual retreat, as I see it, is to give Town staff direction during the preparation of next year’s municipal budget.
That particular budget has been growing by leaps and bounds since 2014, and based on recent sales tax reports presented at Council meetings, 2020 might turn out to be another banner year in terms of Town revenues — in spite of the economic impacts of the global pandemic.
The Town government reported $8.3 million in actual revenues in 2014.
The Town’s budget for 2020 projected revenues of $12.6 million. Of course, that projection was made late last year, prior to the arrival of a microscopic virus that no one fully understands.
But while the COVID-19 pandemic has negatively impacted many Pagosa families and businesses, the effect on Town revenues has been surprising positive. According to a report delivered by Town Manager Andrea Phillips earlier this month, the Town’s sales tax revenue this year, through the end of May, is 14% higher than the same period in 2019 — which was itself a banner year.
In March and April, the Town staff had presented various sales tax revenues scenarios to Council that projected possible reductions due to COVID-19 impacts on the local economy. At that time, the “most likely” scenario presumed a 50% reduction in March, a 75% reduction in April, May and June, a 50% reduction for July, and a 10% reduction in revenues for August, September and October.
However, based on the revenues received for March, April, and May — during the ‘first wave’ of SARS-CoV-2 infections in Colorado — Town staff revised its projection to include ‘actuals’ through May plus a projected 10% reduction in the remaining months of the year.
Four of those remaining months — June, July, August and September — typically show higher sales tax collections than other months. Here’s a chart from 2016, for example, that shows summer sales tax revenues running at least 50% higher than in February or April…
I’ve not heard the Town staff offer a confident explanation for a 14% increase in Town sales tax collections in the midst of a pandemic and associated economic recession, but I assume it has to do with the fact that Archuleta County began to accrue sales tax from online sales; Amazon, Staples, Walmart, Wayfair, Dell, and the rest of the growing ecommerce sector started submitting sales tax to Archuleta County last year, and if I’m not mistaken, the thousands of extra monthly tax dollars started rolling in around June of last year — and the Town and County started reporting “surprising” 10% or 15% revenue increases.
In 2018, the United States Supreme Court fundamentally changed the rules for collection of sales tax by Internet-based retailers, in its decision in South Dakota v. Wayfair Inc.. The Court effectively stated that individual states could require online sellers to collect state sales tax on their sales — thus overturning the Court’s 1992 decision in Quill Corporation v. North Dakota, which had prohibited states from requiring a business to collect sales tax unless the business had a physical presence in the state.
Colorado quickly jumped on the band wagon and required online retailers to start submitting sales tax to the state and to local governments.
Of course, that change created a financial windfall for state and local governments — at the expense of the taxpayers, who used to be able to get essentially a 7% “discount” by making purchases online.
If I am not mistaken (and that does happen occasionally) the Town has been comparing its 2020 sales tax collections — during a spring season when they are collecting taxes from online retailers — to a previous year when they were not yet seeing that windfall. If that’s the case, the surprising comparative increase in 2020 sales taxes will disappear as we move into the late summer and fall.
The Agenda for tomorrow’s Town Council Retreat has a couple of items that I don’t recall from previous annual retreats.
Session 2: Ethical & Professional Standards
and
Session 4: Development Discussion
The agenda packet provided us with no information about those discussions, so we really don’t know what they mean.
We have certainly seen some challenges to the Town’s “ethical and professional standards” over the past few months. I am thinking particularly of the Town Council’s decision, last November, to declare a vacant 27-acre parcel on Hot Springs Boulevard — a parcel that has been vacant, as far as anyone can tell, for 10,000 years — as “dangerous urban blight.” Developer Jack Searle managed to obtain that designation for his vacant property by a 4-to-3 vote on November 5.
I’m also thinking about Town Planning Director James Dickhoff and his obedient volunteer Planning Commission, deciding to ignore pertinent sections of the municipal Land Use and Development Code and recommend approval of Jack Searle’s ‘River Rock Estates’ subdivision as a private millionaire’s enclave.
Perhaps the Town Council will be discussing those two distressing (and possibly unethical) events… and decide not to do that kind of thing in the future…?