Durango sales-tax collections fell 3.5 percent in January, an indication of poor retail sales that bodes ill for local businesses and the city government's sales-tax dependent budget.
The city of Durango collected $1.33 million in sales taxes in January, down $47,714 from about $1.38 million January 2008.
Ron LeBlanc, city manager, said the city has begun looking at ways to save money.
"What we're doing is we're holding back on certain purchases, and we're delaying some purchases, and we're going to hold some positions open," LeBlanc said.
City Councilor Doug Lyon said the council is "keenly alert to the sales-tax situation, and we'll be monitoring that closely."
The City Council briefly discussed the sales-tax dip at its meeting Tuesday.
A 3.5 percent drop, projected for the entire year, would mean a loss of $400,000.
"If adjustments need to be made, a $400,000 adjustment is well within our capability," Lyon said. "We can take simple precautionary steps right now, and if the trend continues, we'll take further action to ensure the city's budget remains balanced over the course of the year."
He added: "We will not run a deficit, period."
School districts also are trying to cut spending in light of lower-than-expected state revenues. Durango School District 9-R expects to lay off teachers and other staff if enrollment falls as much as predicted.
City government has projected flat sales-tax revenues this year. In 2008, sales-tax collections slipped 0.3 percent, from $13.42 million in 2008 to $13.38 million.
LeBlanc said some other cities are much worse off.
"There's a lot of double-digit (percentage) declines on the Front Range," he said.
While drops in sales-tax revenue are most keenly felt by the city government, the revenue is also a closely watched economic bellwether.
In the boom summer of 2006, Durango saw double-digit increases in sales-tax revenue.
Downtown, numerous storefronts appear vacant, including at 742 Main Ave., 801 Main Ave., 865 Main Ave., 1021 Main Ave., 1101 Main Ave. and 1139 Main Ave.