Real estate slump takes bite out of towns’ revenue
By Bob Berwyn
SUMMIT COUNTY — The two-year slump in High Country real estate sales has cut into Frisco’s revenue stream, but strong reserves will enable the town to move ahead with some capital projects this summer.
Even though revenue from Frisco’s real estate transfer tax dropped by 30 percent from last year, the town still took in more money than it budgeted for, said town manager Michael Penny.
The latest available figures don’t include final numbers from December, but the preliminary tally for 2009 shows revenue of $504,043 from the town’s real estate investment fees, down from $752,688 last year, but over budget.
The year to year declines are even more startling going back to the record numbers of 2007, when Frisco reaped almost $1.49 million from its 1 percent transfer fee. Penny said the town doesn’t expect to get back to that level until 2015.
The revenue from the real estate transfer tax goes exclusively to fund capital projects, Penny explained. But because Frisco budgeted conservatively the past five years to build up a cash reserve, the town will be able to proceed with some of the work planned for this summer, focusing on recreation improvements at the Frisco Peninsula.
Penny said the town will use some of its cash reserves and also borrow some money to finance the improvements in order to keep some cash in reserve.
For 2009, every month except September and November showed declines in revenue from the transfer tax from the previous year. The biggest percentage drops were February through June, ranging between 29 percent (March) to an 88 percent drop in February.
Yearly total revenue from the REIF
2004 — $1.10 million
2005 — $1.34 million
2006 — $1.35 million
2007 — $1.48 million
2008 — $0.75 million
2009 — $0.50 million (not final)
Revenue from sales taxes also declined in 2009, by 14.5 percent through the end of November. The December numbers, which will help tell the story of whether how this year’s Christmas holiday ended up, aren’t available yet.
Lodging tax in Frisco was down by 16.53 percent through the end of November, sales tax revenue from restaurants and retail sales were also down by about 11 percent, not including the December figures.
Breckenridge town manager Tim Gagen expressed a view similar to Penny’s — it could have been worse.
The preliminary year-end figures show the town garnered about $2.8 million from its real estate transfer tax in 2009, down from the glory years, when the figure reached about $5 million.
The year started slowly but sales — especially of single-family homes, picked up in the last four months of the year, Gagen said.
At the start of the year, the town had budgeted $3.5 million for real estate transfer tax revenues, but revised the figure downward to $2.5 million. Breckenridge is conservatively budgeting that same amount again this year.