Tax revenue falls short of forecasts for RTD

Kevin Flynn, Rocky Mountain News

Published April 11, 2007 at midnight

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RTD's sales tax collections continued to dip below forecasts in February, but a state economist told board members this week that short-term dips are to be expected during long-term growth.

February was actually a good month for overall sales tax revenues at RTD, up 6.7 percent over February 2006.

But it was still 2.7 percent below the transit agency's budget forecast.

For the first two months this year, sales taxes are up 4.5 percent over last year, but again, below forecast by 2.1 percent.

Use taxes, a type of sales tax that make up a smaller portion of revenues, were up significantly, closing the gap somewhat.

Last week, RTD disclosed that sales tax projections over 25 years, part of the financial plan for the ambitious $4.7 billion FasTracks program, have been revised downward, and that the agency could take in $1 billion less than estimated when voters approved the FasTracks plan in 2004.

Using standard state projections for five years, then extrapolating at an average rate for the next 20 years, RTD figured to take in $9.45 billion through 2030. But with lower-than-anticipated growth the last few years, the new estimate is $8.35 billion.

That affects RTD's ability to issue and pay off bonds, which will provide about half the funding for FasTracks.

Josh Harwood, chief economist for Gov. Bill Ritter's Office of State Planning and Budgeting, told the board's financial administration committee on Monday that, statewide, sales tax revenues are up about 8 percent.

But when the state analyzed where the sales came from, metro Denver was the poorest performing region in the state. The metro area was up 4.2 percent last year, while every other area of the state was higher. The Western Slope and mountain regions were the highest, at 13.9 and 10.5 percent, respectively.

Harwood said the booming natural resources economy, including mining, oil and gas, are driving greater spending in those regions.

He told board members that small changes in long-range forecasts can have far-reaching results, but the overall trend is up.

"That problem is always going to be there," he said.

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