Friday, May 21, 2010

Sun Valley LOT still lagging

Despite rebound in Ketchum, tax revenues remain below average

Express Staff Writer

Michael Petersen, a worker at the Konditorei café in Sun Valley Village, stands behind the counter waiting for a customer. Monthly local-option tax amounts show business in town being short of the decade average for 16 straight months. Photo by David N. Seelig

Ketchum businesses broke out of a 19-month slump in March, but the good fortune didn't travel one mile northeast to Sun Valley.

The Idaho Mountain Express reported on May 12 that Ketchum businesses made more money in March than they did in March 2009, even though it was only a slim improvement of 0.06 percent. Ketchum collected about $114,000 in local-option taxes, a mere $73 more than it did in March 2009. That doesn't seem like much, but a year-over-year improvement was something that couldn't be claimed dating all the way back to August 2008.

The last month of the ski season wasn't as fortuitous for Sun Valley, which released its March LOT report this week. LOT is important because it's a reliable barometer of the town's economy. All Sun Valley businesses impose a 3 percent sales tax on lodging, by-the-glass liquor sales and tickets to events in the city. A 2 percent tax is imposed on most retail sales and a 1 percent tax on ski lift tickets and season passes.

And Sun Valley saw about 8 percent fewer LOT dollars than it did in March 2009. About $91,100 was collected, near $8000 shy of a year ago. March marks the 11th straight month that LOT has been lower than the same month of the previous year.

And March 2009 isn't an indicator of normal business levels. The decade's average of $126,500 for March is a better benchmark. When compared to the average, March 2010 was 25 percent—or $35,000—short. Plotting each month against its long-term average shows that the losing streak is actually 16 consecutive months. The last time a month surpassed its average LOT amount was November 2008 when $40,000 was collected, about $3,000 more than the month's average. These 16 months averaged an 18 percent lag behind their averages, meaning March's 25 percent lag isn't a sign of improvement.

Even though Ketchum showed a year-over-year improvement in March while Sun Valley lagged behind, Sun Valley actually did better in the big picture. Ketchum collected $114,000, about half of March's average. Sun Valley was behind only a quarter.

Past year's amounts used to calculate long-term averages in this story were inflated to reflect current dollar values.

Trevon Milliard:

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