The city of Ketchum received some more bad news about its budget this week. Income from local-option taxes for December—normally the most lucrative tax-collection month of the year—were down 33 percent from the previous year, leaving the city without tens of thousands of dollars it anticipated having in its coffers.
Ketchum LOT receipts for January 2009—which reflect taxes collected by city businesses in December 2008—totaled just under $184,000, some $91,000 less than the sum the city tallied in January 2008. This year's figure is nearly $80,000 less than what the city included in its 2009 fiscal year budget.
All told, four months into the fiscal year, the city has brought in some $176,000 less than what city officials projected.
The numbers are considered by many to be a reliable indicator of the strength of the local economy since the taxes draw heavily from the tourism and retail sales sectors. In its LOT program, Ketchum levies a 1 percent sales tax on non-food retail items, as well as a 2 percent tax on hotel rooms and by-the-drink liquor sales. The city also charges a 1 percent tax on sales of building materials.
The taxes are sanctioned by the state as a means for small resort cities to offset the costs of providing public services to large numbers of visitors.
All tax categories suffered declines during the month. Retail sales—normally stout in the month of December—were hit hard, falling nearly 35 percent compared to the same month last year. Taxes on hotel rooms and condominium rentals also declined sharply—33 percent and 48 percent, respectively. Receipts from liquor sales decreased 35 percent, while revenue from taxes on building materials dropped a staggering 53 percent.
In its budget, the city anticipated banking about $2.2 million in LOT receipts. Through the first four months of the fiscal year, it has collected just over $545,000.
Carol Waller, executive director of the Sun Valley-Ketchum Chamber & Visitors Bureau, said Ketchum's grim December numbers reflect the overall pain in the nation's economy.
"The situation is pretty much a straightforward function of the economy and the fact that we opened late," Waller said in an interview.
Sun Valley Resort opened for its 73rd season on Dec. 10.
Misery loves company, however; Waller said she's been talking to her contemporaries in other resort towns around the Rocky Mountains and hearing similar stories.
"We're all in the same boat," she said.
Express staff writer Dick Dorworth contributed to this report.
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