Dillon has seen a sharp decline in sales tax revenues so far this year, town finance director Mary Kay Perrotti told Dillon Town Council at a work session Tuesday, April 8.

From the start of the year through February, sales tax revenues in Dillon are down about 11% compared to last year, or about $200,000, Perrotti said. She recommended that the council consider deferring several capital projects until 2026 to compensate for the declining revenue.

Dillon Town Manager Nathan Johnson told the council “sales tax is a key driver for our budget, and if it’s declining in double-digit numbers, we want to be up-front about that and come up with a solution.”

Unlike other towns in Summit County, the state collects sales tax for Dillon rather than the town itself, leading to a two-month lag in the town’s numbers, Perrotti explained. She noted that Dillon had budgeted for sales tax revenues to be flat in 2025 compared to 2024.

Because of the two-month lag, Perrotti said the town doesn’t know whether the sales tax decline continued into March or how long the trend might continue. She recommended that “it’s better to be conservative.”

Johnson said that he is hopeful that sales tax will rebound in March, but he doubts that it will rebound enough to make up for the decline in the first two months of the year. To balance the 2025 budget, Dillon already cut 10% of all seasonal employees, so before making changes that could impact employees, he said that the council should look at deferring projects in the capital budget.

Perrotti said the town has identified about $400,000 for a town park plaza project, $150,000 for the replacement of docks at the marina and about $200,000 for an analysis for a new police department facility that could be deferred to next year to help save money. The combined $750,000 saved by deferring those projects could help prepare the town if sales tax revenues were to continue to decline, she said.

While the council did not make any decisions Tuesday about whether to defer those projects, Perrotti noted that it would have to decide soon because the town park plaza project and the dock replacements are projects that would be completed during the summer.

Johnson noted that unlike the other capital projects in the budget, the police department facility analysis could get underway at any point in the year.

Council member Oliver Luck said that he believes being conservative with capital spending would be a “prudent approach to take.” Luck said that with the “stock market in the tank, people aren’t feeling as wealthy as they did last year or two years ago, so we could have fewer visitors,” resulting in declining sales tax.

Council member Barbara Richard agreed that “consumer sentiment has declined.” But Richard said that from what she has seen, booking patterns are “looking good” for this summer in Summit County.

Noting that weather patterns in January and February were “unusually harsh this year,” council member Josh Samuel said that he noticed that “ski area attendance was huge” in March, so he is hopeful that sales tax revenues will rebound a little.

Perrotti noted that Silverthorne has also recently seen a decline in sales tax revenue. She said, “We’re hoping we can make this trend up, but in light of the current economic environment, we don’t know.”