April 17, 2008
Town of Taos Economic ‘Tracking’ Numbers As a municipality, the Town of Taos currently has two consistent systems to help track the status of the Town’s tourism-based economy -- through monthly gross receipts tax (GRT) revenues, and lodger’s tax revenues. This office has worked with Town elected officials, staff, the media, lodgers, the tourism industry, business representatives, and community constituents to talk about how best to get out these revenue numbers on a regular basis so that this documented information can be used by all of us to track, to a certain extent, what is going on with tourism in our community. The Town has worked to try and develop something that is clear, consistent, meaningful and compares ‘apples to apples’ each month. We are providing this data to try and improve upon previous, less reliable, less comprehensive, or not wholly accurate reports. Some of these past reports, such as the Rocky Mountain Lodging Report (RMLR), have been controversial in the Taos community. Such reports can be based on a voluntary reporting mechanism, run by a for-profit company, include a very small universe, cluster Taos with arguable comparative areas, or cannot necessarily account for increases in available lodging rooms/new properties or night counts vs. revenues/occupancy, and other obstacles for using them as regular or accurate gauges. In fairness, many of these alternate reports have gained public acceptance because the Town of Taos has not taken definitive action to provide more sound alternatives. So, the Town of Taos is now attempting to correct this situation. These numbers are presented each month by the Town of Taos Finance Department to the Mayor/Town Council at their Regular Meeting, and will be issued publicly following the release of these reports. Should you wish to receive these numbers, and other Town of Taos News Briefs on a regular basis, please sign up by sending an email to firstname.lastname@example.org. As a benchmark for the Town’s ongoing revenue reports, the following Town of Taos tax revenue figures are laid out for the last few years, with a month-to-date update for 20072008 at the conclusion. In addition, a roster of the lodgers included within the Town limits is included so all can see which properties are in this reporting area. Also, important perspectives are highlighted about the Town’s reported numbers – perspectives that need to be taken into account when interpreting even the Town’s actual revenue based report.
Information and Perspectives about ‘the Numbers’ • • • • Gross Receipts Tax Revenues (GRT Revenues) are received by the Town two months after they are paid. So, when you read about December’s GRT revenues, they are for the month of October. GRT is paid on almost all in-Town purchases/projects – construction/real estate (including a percentage of the expenditures by NMDOT projects), food, retail, galleries, etc. Lodgers Tax Revenues usually lag approximately a month behind. So unless noted otherwise, when you read about December’s revenues, they are from the month of November. Obviously lodger’s taxes are paid predominantly by tourists staying in shortterm rental properties (hotels, motels, bed and breakfasts). To date, there has not been an effective mechanism for collecting lodgers taxes on short-term condominium rentals (rentals made for periods under 30 days). There are lodgers who get ‘behind’ in their lodger’s tax payments to the Town – but in almost all instances during the last several years, Finance reports that they pay up by the end of the Town’s fiscal year. During some periods, these amounts due are substantial, and when a property gets three months behind, legal action (letters, a potential lien on the lodging property, etc.) is pursued by the Town’s Legal Department. The Town’s Finance Department must prepare and finalize projected budgets for the Town for the coming fiscal year by end of May. So, given that lag in revenue payments already noted, there is obviously an approximate four month budget-to-actual ‘estimating’ that goes on when it comes to anticipating revenues coming in so that budget projections can be made moving forward. Finance is usually always conservative enough that by the end of each year there is some surplus generated that is not allocated immediately to budgeted operations – and often this is the revenue increment used to immediately support programs in the new fiscal year, underwrite existing programs that need added funding, and/or enable the Town Council to expand program/project budgets. For instance, in fiscal year 06-07, Finance estimated a 3% gross receipt revenue increase that proved ultimately to be above that level in actual receipts – and so approximately $500,000 came in through additional revenues at year’s end going into fiscal year 07-08. These monies are used for a variety of purposes -- to fund programs within the Town, in addition to funding marketing programs such as those this last year of the Taos Gallery Association, New Mexico Women in the Arts/Original’s 2007, Santa Fe Film Festival, an extension of marketing with Destination Taos, added marketing funds for Griffin & Associate’s efforts when their contract was signed in October, and other undertakings. This year, given the overall economy, and with a 4% growth rate by Finance for the Town’s existing budget over last year, it is anticipated that much less – if any -- ‘surplus’ will be available for the 08-09 budget start-up.
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Finance must also perform a balancing act for the Town when it comes to projected vs. actual revenues – performing mid year budget adjustments with staff -- and anticipating, as do local merchants, that potential in-town winter/early spring revenue slumps turn around in late spring/early summer with revenue boosts. The current budget projections for 2007-08 are based on an anticipated 4% gross receipts increase over last fiscal year; and a lodger’s tax increase of approximately 3%. Before GRT revenues came in for January, 2008, actuals were on target for 2007-08. However, with January’s revenues, actual revenues compared to budget projections are 1% below where they should be. Historically, this up and down, month by month, in actual revenues for the Town is not unusual – with 12-14% swings possible during any given month, particularly during the late fall through early spring. It is something the Town of Taos and the entire marketing community is working to overcome moving forward. In contrast, February 2008 actuals for lodger’s tax revenues are up 19.34% compared year-over-year for the same period. GRT paid to the Town is around $11 M annually; Lodgers Tax Revenues are projected to be at least $950,000 this coming year. These budgeted GRT and Lodgers Tax revenues are used for Town of Taos operations, annual capital improvement projects, and marketing activities, after the required reserves are deposited (1/12th, or approximately $1M annually). In addition, the Town of Taos successfully applies for and receives appropriations, grants, and other funding from State and Federal sources, bringing the entire Town budget, including capital projects funded from these other sources, to around $44 M annually.
The Town of Taos Revenue Numbers Over Time: Lodgers Tax Revenues Collected by Fiscal Year 2001-02 $798,296.96 2002-03 $854,448.28 2003-04 $838,068.10 2004-05 $859,899.37 2005-06 $942,427.97 2006-07 $932,042.56 2007-08 The Town budget projection total for this year for Lodger’s Tax is approximately $960,000.00; a 3% increase over 2006-07. The table on the next page presents actuals for the Town for 2007-08 Lodger’s Tax revenues through February. This 2007-08 sub-total is $743,198. If March through June revenues from last year, approximately $302,000, are presumed to be about the same for this year, the end-of-fiscal-year 2007-08 total will be approximately $1,045,000.00.
Fiscal Yr. 2006-07 July 06 August 06 Sept 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 March 07 April 07 May 07 June 07 TOTALS
Lodger’s Tax by Month 119,747.58 97,125.32 102,125.22 90,033.81 43,899.68 70,514.11 45,462.40 53,846.19 85,048.75 51,518.13 86,129.54 93,078.83 938,529.56
Fiscal Yr. 2007-08 July 07 August 07 Sept 07 Oct 07 Nov 07 Dec 07 Jan 08 Feb 08 March 08 April 08 May 08 June 08
Lodger’s Tax by Month 117,507.05 106,195.47 108,790.13 99,349.56 44,657.29 72,820.64 138,188.01 55,690.03 0.00 0.00 0.00 0.00 743,198.18
GRT Revenues by Fiscal Year 1991-92 $172,536,734.00 1992-93.1 $187,034,755.00 1993-94 $205,837,154.00 1994-95 $224,452,290.00 1995-96 $232,114,506.00 1996-97 $235,426,817.00 1997-98 $245,632,476.00 1998-99 $266,969,589.00 1999-00 $268,243,156.00 2000-01 $278,691,185.00 1001-02 $297,717,455.00 2002-03 $305,086,403.00 2003-04 $350,083,742.00 2004-05 $336,397,474.00 2005-06 $360,397,474.00 2006-07 $378,545,543.00
Percent Increase Over Previous Year 8.41 10.5 9.04 3.41 1.43 4.33 8.69 4.01 3.89 5.31 3.97 14.75 <3.91> decrease 7.17 5.1
Lodging Properties in the Town of Taos: Adobe Wall American Artist Gallery House Casa Benavides Casa de las Chimeneas Casa de Los Pasajeros Casita de Sonterra 4
Comfort Suites Day's Inn Don Fernando Dreamcatcher El Castillo de Taos El Monte Sagrado El Pueblo Lodge Everest Enterprises (Super 8) Hacienda del Sol Hacienda Inn Hampton Inn Indian Hills Kachina Lodge La Dona Luz La Fonda de Taos La Posada de Taos Laughing Horse Inn Quality Inn Paragon Inn Sagebrush Inn Sun God Lodge Taos Hacienda Inn Taos Inn Taos Lodging Taos Vacation Rentals Touchstone Inn Worldmark, Taos (previously Fechin Inn; Town has not received revenues from this property yet)