Magazine article Baylor Business Review

Sales Gains Healthy

Magazine article Baylor Business Review

Sales Gains Healthy

Article excerpt

Consumers have confidence, but it's tenuous," said Bill Barrows, president of the Colorado Automobile Dealers Association.

While that comment may seem out of place considering Barrows reported a statewide increase in car sales of 17.3 percent through September, it does parallel the current good health of sales tax revenues but conservative outlook for 1990 by city budgeters and finance directors, as well as state economists.

Overall, Boulder County has prospered as year-to-year date sales tax revenues show increases from 1988, and a good, although not exceptional, Christmas season is anticipated. And while some economists and city forecasts indicate a late 1989 and 1990 slowdown, 1991 looks brighter, indicating Boulder County retailers and city coffers should remain fairly satisfied.

All five of the major cities of Boulder County -- Boulder, Longmont, Broomfield, Lafayette and Louisville -- have enjoyed tax revenue growth in 1989, although at slower rates than previous years. City finance officials seem to believe slower growth will continue, with most projecting gains of less than 4 percent for 1990.

While Longmont's budgeted forecast shows a 7 percent growth over 1989, Finance Director Jim Golden suspects it actually will be closer to 4 percent. Louisville's 1990 budgeted forecast, showing a comparatively high 8 percent increase over 1989, is anticipated to come from regained food sales and continued growth, according to Sharon Asti-Caranci, financial services director.

So why a possible 1990 slowdown?

Boulder Budget Director Steve Fischer said NBI and MiniScribe layoffs, skepticism that the economy has completely recovered, and continued loss of retail sales to surrounding communties all contributed to his projections.

Michael Urie, Broomfield's finance director, doesn't believe Broomfield will see the kind of growth it has for the last four years. "It's simply the nature of the business cycle."

Mirror national trends?

And Boulder County may simply mirror national trends. A September 1989 report by K mart's corporate economist, Robert Hayes, states the nationwide surge in consumer spending during the mid and late `80s may be losing steam as satiated consumers, worried about their financial futures, must be enticed to buy.

Another reason for a slowing in 1990, according to Nancy McCallin, chief economist for the Colorado Legislative Council (CLC), is Boulder County's significant manufacturing base. Compared to a statewide 13.3 percent, Boulder County's 27 percent manufacturing base makes it sensitive to the nation's softening manufacturing industry. Deriving 35 percent of its income from manufacturing, tax revenue increases for late 1989 and 1990 are unlikely, the CLC's recent staff report predicts.

"Boulder County will slow down significantly in 1990 because exports and capital investment are down and the trade deficit up," McCallin said. Conversely, she says, in 1988 and early 1989, exports and capital investments were up and the trade deficit down.

Kirchner Moore & Co., a Colorado sales tax forecasting service, has reported similar projections in their September 1989 forecast. "While many retailers remain optimistic about economic prospects over the next two years, the odds are increasing that a more austere period is once again upon the Colorado retail market," the report states.

But good news is not far off, McCallin believes. Fortunately for Boulder County, businesses continue to be attracted here, ensuring added dollars to the area. And McCallin foresees a quick rebound in 1991 because of it.

There is the obvious addition of U S West Advanced Technologies, adding approximately 500 jobs to Boulder, and three major companies to Longmont that will add more than 1,000 jobs by late 1990 to 1993, McCallin says. Broomfield, too, will benefit from major expansion by Hunter-Douglas, which Urie said would add nearly 1,000 jobs by 1993. …

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