Amid shrinking revenue, Boulder urges shoppers to 'buy local'

September marked the 13th month in a row that the city of Boulder posted declines in sales tax revenues.

As of September, collections from retail sales are down 5.6 percent compared to the first nine months of 2008, according to the city's finance department. Combine that with the collections from the more volatile use tax category -- from areas such as construction projects and property purchases -- and the total revenue from sales and use taxes is down 0.92 percent from the same period last year.

As Boulder and other local municipalities wade through yet another month of slower sales -- and less funds for city services, streets and parks -- the holiday shopping season approaches.

"We'll be watching closely," said Paul Nilles, finance director for the town of Superior, where sales tax revenues are down 2 percent through September compared to the same period last year. "We'll be cautiously optimistic."

Seeing how key Christmas shopping is to area businesses, local cities are not only keeping a close eye on the health of holiday sales, but some also are stepping up efforts to urge residents to "buy local" to help pad city coffers.

"I think most Boulder shoppers know that there is a benefit to shopping here," said Liz Hanson, the city's economic development coordinator. "I think they may not understand about why it is important."

Buy local

To help answer that "why," a cluster of city employees spent the past two weeks creating and launching "Buy Into Boulder" -- a Web site and education campaign that reminds shoppers that $3.41 of every $100 spent at Boulder businesses goes toward city programs.

The Web site, buyintoboulder.com, contains information and maps for area shopping centers; sections on sales taxes and what exactly they fund; and "fun facts" and details about local businesses and industries.

In a section tabbed "Sales Tax 101," the city airs its concerns:

-- 2008: The city collected $2.1 million less in sales and use taxes than were projected

-- 2009: The city anticipates that sales and use tax collections will be at least $5.4 million less than originally budgeted

-- 2010: Collections could be lower than originally projected by as much as 8 percent or $7.2 million

"(The holiday shopping season) is a make or break time for many local retailers," Hanson said. "The retail sector has been really hard hit in this recession and it's when many retailers make almost half of their sales."

"It's a really good time to bring attention to" the plight of the city and local businesses, she said.

Seleyn DeYarus, president of Boulder-based Best Organics LLC -- a provider of gift boxes with Boulder County-made organic products under the Boulder's Best Organics and Colorado's Best Organics names -- said she thinks the "Buy Into Boulder" campaign is a great idea.

"I think it's an important tool to really inspire the community about how they can be a force of positive support to the businesses that make this community thrive," she said.

Just north up the highway from Boulder, the town of Lyons is hoping for some good tidings and community spirit as well to help its local businesses.

Starting on Friday and running through the end of the year, the Lyons Area Chamber of Commerce is launching a "buy local" campaign where the consumers who buy the most goods in the town will be rewarded with cash prizes and gift baskets.

The move was designed to assist businesses affected by recent remodeling and paving projects along Main Street that contributed to deterred sales, said John O'Brien, president of the Lyons Chamber.

"We definitely want them to spend locally, not only to help the local economy, but especially to help the local merchants," he said.

However, not all think "buy local" campaigns can be fruitful.

Marshal Cohen, an analyst for New York research firm the NPD Group Inc., said that while efforts such as "buy local," "buy green," and "buy American" may have some good intentions, the effects are not always as positive. The best deals prevail, he said.

"The consumer still comes down to buying what they want, at the price that they want, when they want it," he said.

Hanging on

For the past two years, the city of Boulder has collected 18 percent to 19 percent of its total annual sales taxes during the months of November and December.

To continue that trend this holiday season, local businesses would have to collect about $16 million. But Boulder finance officials say that's not likely to happen, and they are projecting a 1.9 percent decline from 2008 tax collections -- a difference of about $1 million.

Duane Hudson, the city's deputy finance manger, said Boulder has already built in the expected decline into the 2010 budget.

"If we come in at about $15 million, we're still on track," Hudson said. "We do have reasonable reserves set aside if there is a shortfall. We've been pretty conservative in our approach for next year."

If holiday sales are much weaker than expected, though, it could force the city to reevaluate the budget in mid-February when the December sales-tax report is complete.

During the recession, practically all retail sectors have been negatively affected, with apparel stores, home furnishings retailers and consumer electronics retailers being hard-hit.

As a retailer of higher-end jewelry, accessories and clothing, local businesswoman Elena Ciccone said she has definitely felt the effects of the economic downturn.

"The last year has been difficult for many ... I'm not an exception, especially in my business," said Ciccone, who runs the eponymous store at 947 Pearl St.

The economy was one of a handful of factors that played into Ciccone's decision to close her 8-year-old store by Christmas Eve. Combining that with the ending of her lease, the falling through of efforts to move or sell the business, and a stirring to move to the East Coast, Ciccone said it was best to move on.

She said she plans to have Elena Ciccone continue online as an e-commerce business.

Camera Staff Writer Heath Urie contributed to this report.