Jonson Kuhn/The Aspen Times
Aspen Finance Director Pete Strecker provided Aspen City Council with a presentation on the city’s financial quarterly update on Monday during a regularly scheduled work session. With regard to Aspen’s sales tax in particular, Strecker said he expects a softening in numbers at the year’s end followed by a modest growth return for 2024.
“Overall for 2023 we’re expecting a 1% decline over 2022’s final tax collections, and then we’re anticipating just under 2% growth right now the following year,” he said.
The total projected sales tax collections for all funds, such as parks and open space, public schools, Kids First/affordable housing, and transportation, came in at $28,805,900 for 2023, while 2024 is projected at $29,332,000.
Interestingly enough, the two areas that saw the highest decrease from 2022 sales into 2023 were liquor and marijuana. Alcohol saw a decrease of 9.5%, $9,268,728 to $8,388,485, while marijuana dropped 17.3%, $6,931,542 to $5,734,353. The dramatic decrease in numbers is speculated to be a result of the COVID-19 pandemic coming to an end.
With regard to lodging tax, Strecker said occupancy was stronger toward the beginning of 2023 with high numbers, but recently has seen a decline, sitting at 62% compared to the 63% benchmark of last year. Occupancy was at its highest in recent years at 65% in 2019 with a daily rate of $470. He also noted that despite the slight decline, the daily rates have still been very strong, which on average for this year is currently at $716.
“If I was a betting person, I’d probably anticipate that daily rates might have to come down a bit to try to attract some visitation,” he said. “This year we’re anticipating about a 4% fall off from 2022’s numbers and for next year we’re kind of keeping our expectations a little lower, by projecting a 1% growth at this time.”
City Manager Sara Ott added that part of the decrease in occupancy seen has been due to having two of the city’s hotels offline, the Molly Gibson and the White Elephant, but with their return she said they anticipate an influx resulting in a market adjustment.
Total projected collections of funds for tourism promotion and transportation were at $5,593,000 in 2023, with projects for 2024 at $5,649,000.
Real estate transfer taxes were among some of the lowest numbers projected for the current and coming year, with a softening of 18% this year followed by an additional 10% projected in 2024. Strecker said much of this was due to “low inventory.”
Strecker said that the numbers are still low from record sales over the past couple of years, with the overall volume of 2022 at 493 compared to 445 in 2023. He added that the more important factor is seeing the dollar value down by roughly 20% from $1,493,722,090 last year to $1,200,577,645 seen this year. Total tax collected for 2022 was $21,972,801 compared to 2023’s projection of $17,654,609.
“We’ve had a lot of either low-dollar value or no dollar value transfers, sometimes those happen for state planning purposes or other consideration items. We’re down by about 20% and we anticipate staying roughly at that level for the rest of this year, just given how high the benchmark was in 2022,” he said. “This isn’t necessarily the bottom falling out by any means, but I think until more inventory can come back, we should anticipate a conservative approach at this point.”
Strecker also addressed short-term rental tax which was recently approved by voters and put into effect as of last May. Due to the short amount of time he said there wasn’t much data to set benchmarks against; however, he believed the current numbers were running at 15% to 20% off of projected expectations for the year. He said the city still expects roughly $4 million for the year, with resources predominantly going toward affordable housing (70%) and capital and environmental initiatives (30%).
To reach Jonson Kuhn, email him at [email protected].
