The town of Wellington collected $683,975 in sales tax revenue in 2011, up 11.6 percent from 2010, according to preliminary figures from the Colorado Department of Revenue. And the cash received in the first two months of 2012, based on collections at the end of 2011, is keeping pace.
This represents the first significant increase in sales taxes for the town since 2007. While 2008 and 2009 remained nearly flat at about $607,000 and $618,000 respectively, revenue dipped to only $613,000 in 2010.
Wellington Finance Director Mike Cummins is happy to see the trend reverse.
“It means that all the businesses in town are doing more business than they were in 2010,” he said. “I think we’re seeing more trade from the interstate (I-25). That’s nothing new, but more people are taking advantage of what we have to offer.”
Wellington is not a home-rule city, so sales taxes are collected by the state. The small number of businesses in town makes it impossible for Cummins to talk about the breakdown of industry sectors contributing to the total without revealing figures for individual businesses. He did say that contrary to expectations, new fast-food outlets have not displaced revenues from existing restaurants.
The next benchmark Cummins would like to see the town achieve is to have sales tax revenue eclipse property tax revenue, to help attract new companies.
“When sales tax is the single greatest source of revenue, that tells businesses that your town has reached critical mass,” he explained. “Prosperity begets prosperity, and merchants want to locate in a town that has proven itself economically viable.”
Cummins said Wellington has come close to receiving more sales than property taxes in the past. This year could be even closer – in part because the county assessor has revalued many properties, especially raw land, downward. The overall value of property in town dropped 6 percent, and the municipal budget for 2012 reflects the decrease.
Final audited sales tax figures will be submitted to the Department of Revenue in May, Cummins said.