Friday, July 18, 2008

Ketchum LOT remains below budget

Receipts from building materials lag in May

Express Staff Writer

Building materials were on the wane in the third quarter. Ketchum’s building market roughly mirrored the national housing market downturn.

Receipts for building materials contributed to a decline in Ketchum's local option tax receipts for the third quarter of the fiscal year, a period coinciding with a downturn in the national housing market and a cold spring locally.

The slowdown in construction led to a 30.6 percent decrease in related LOT revenue from May 2007.

While liquor receipts enjoyed a 24.3 percent increase over the same month one year previous, this tax revenue of $9,978 wasn't enough to pull this year's overall LOT above budget.

As well, May's retail receipts were up 4.3 percent, from $55,870 to $58,297, but room receipts dropped 14.4 percent, from $4,626 to $3,958.

With $118,500 budgeted for May and only $104,479 received, Ketchum is now a total of $117,654 below what had been originally budgeted for the first nine months of the fiscal year, which runs from October through September.

The city imposes a 2 percent sales tax on lodging and liquor by the glass, and a 1 percent tax on items in the other categories. The money goes to the city's general fund, helping to pay for public transit, land acquisition and public services such as police, fire and ambulance.

The taxes are charged as part of a state-approved program to help small resort cities offset the public costs of hosting large numbers of visitors.

The third quarter, comprised of receipts from March through May, saw a 2.7 percent year-over-year decrease, and was approximately $10,000 below the average for the quarter over the past seven years of LOT revenue.

The decrease in construction was a major factor in the implementation of a hiring and discretionary expenditure freeze for all municipal departments, which began in May.

The spending cuts were put in place to help provide at least a $300,000 cushion in the city's general fund to avoid dipping into reserves.

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