Photo by Marty Caivano

Sales consultants Adam Palmer, left, and Joe Cooper wait for customers at the Anderson Kia car dealership in Boulder on Friday afternoon. Although automotive trade is down 10.3 percent from this time last year, owner Brad Anderson said the dealership is benefiting from an increase in SUV trade-ins spurred by gas prices.

Last month, Boulder's finance director told City Council members that economic hardship could be hitting home -- March's sales tax revenues dropped 9.4 percent from the same month a year earlier.

It was the first month-over-month decline since November 2006, and a drop that sent year-to-date collections down 0.15 percent from the first quarter of 2006.

The figure, some council members said at the time, was something that should warrant some concern.

During April, though, things got a little better.

Sales-tax revenues were 8.5 percent higher than in April 2007, bringing the year-to-date performance to an increase of 1.8 percent, according to a recently released finance report.

"You can see the economy is growing a little bit," said Duane Hudson, the city's deputy finance director and controller. "Obviously, there is some growth, not a huge amount, but some growth there."

When factoring in use taxes -- collections that could be considered "one-time" in nature from areas such as tangible personal property and construction projects -- year-to-date revenue is up 7.72 percent. That is above forecasts that have Boulder finishing 2008 with sales and use tax revenues up 3.8 percent from last year, Hudson said.

City officials are forecasting that sales and use tax revenue will be about $86.9 million in 2008.

Since sales taxes are less volatile, they are typically used as a gauge for economic health, said Ed Kaiser, Boulder’s revenue and sales tax business information manager.

Strong sales 

Four months into 2008, some of the areas that reported stronger sales tax revenue performances were Pearl Street Mall, Table Mesa, the University of Colorado, University Hill and Twenty Ninth Street. Through April, Twenty Ninth Street has contributed $1.8 million in city sales tax revenues.

Categories such as food stores, restaurants, apparel and home furnishings also saw gains in revenue from sales tax.

Business at home furnishings retailer HW Home, which opened its first store in Boulder nine years ago, has been considerably strong so far this year, said co-founder Ron Werner.

Werner attributed his company’s success to the store, at 1941 Pearl St., being located amongst a revived East Pearl business scene and maintaining guiding principals such as working hard; providing customers with what they need; investing in advertising; and not cutting back on staff.

Sometimes, Werner added, retailers who become nervous about the economy make the mistake of pulling back on some of those business practices.

“We didn’t buy into the doom and gloom, (and that) the world’s coming to an end,” he said. “Economies run in cycles.”

Taking a hit

However, not all business sectors in Boulder are experiencing positive gains in sales tax revenues so far this year.

Automotive trade is down 10.3 percent from this time last year, and consumer electronics and computer-related business are down 14.6 percent and 26.2 percent, respectively.

For Blue Spruce Auto Sales Inc., 4403 N. Broadway, January and February were “really strong” months, manager Bart Caddell said. The dealership “bit the bullet” in March, merged with Boulder-based Super Rupair Inc., and sales remain on par, he said.

“Overall, sales are holding steady,” he said. “But I’m telling you, it’s the gas prices that are affecting people. We are getting people in left and right with their SUVs.”

Anderson Kia, which opened in March and replaced the defunct Champion Ford at 3200 28th St., has benefited from the growing trade-in of sport utility vehicles, and also from being a new business, said owner Brad Anderson.

“We’re optimistic on where we are and where we’re going,” Anderson said. “Obviously, like any business, we want to be always doing better.”

While city officials said in the April sales tax report that people are pulling back on discretionary spending, business has been “pretty good” at Mike’s Camera, 2500 Pearl St., said Mike Dobson, sales manager.

Things have slowed this month, something Dobson attributed to gas prices. Mike’s Camera is a destination store, and if more people curtail their driving, it could have a negative effect, he said.

Even if gas prices meet the projections and stay above $4, Dobson said he’s optimistic.

“It’s tough to say, but I think it will still be a good year,” he said.

Contact Camera Business Writer Alicia Wallace at 303-473-1332 or wallacea@dailycamera.com.