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Dip in town sales, lodging tax revenue, but treasurer expects F.H. will finish year as budgeted

Friday Harbor sales tax receipts are about $15,500 lower than in 2007, and hotel/motel tax receipts are about $10,000 lower than in 2007, according to a report from the Town Treasurer's Office.

But Town Treasurer Wendy Picinich said she expects the town will come out as budgeted: $950,000.

The latest report shows monthly receipts from January to September. The town receives its share of locally-generated tax revenues two months after they are reported. That means, sales tax revenue received in January was generated in November, sales tax revenue received in February was generated in December, and so on.

It also means that the amount of revenue generated in August is not known yet; it will be received this month, so the full impact of summer can't be measured yet.

Months reporting record sales tax receipts: January, $61,991.27; and March, $80,682. Bummer months: November, $74,128.92, down from $81,744.30 the previous year; April, $63,593, down from $96,194.16 the previous year; and June, $104,245.56, down from $114,229.76 the previous year.

Year-to-date, the town received $730,588.46 in sales tax revenue by the end of September, down from $746,198.49 in year-to-date 2007. But that amount is still the second-highest amount collected, according to town data dating back to 1991.

Likewise, hotel/motel tax receipts are slightly lower than in 2007: $77,779.81 year to date, compared to $82,832.33 the previous year. The town collects that amount twice — one 2 percent tax is charged to support tourism-related facilities, such as the county fair, parks, museums and theaters. Another 2 percent is collected to support tourism promotion.

Picinich expects the town will end the year with $100,000 from each 2 percent tax. That's another conservative estimate, considering the town received $140,000 — a record — from each 2 percent tax last year.

"Each month has different things in it," Picinich said. "There are quarterly payments or annual payments coming in, or a one-time item that was sold, or in one month somebody is paying back 10 years of sales tax."

Picinich said 2007 had some big months because of major construction projects that pumped sales tax revenue into the economy. Chief among those projects was the construction of Churchill Corner and Village at the Harbour assisted living.

Countywide, sales and lodging tax revenues are lower than budgeted. From January to end of September, the county had received $2,852,500.76 in sales tax revenue and $482,756.02 in lodging tax revenue, according to Nancy St. Pierre of the County Treasurer's Office.

While construction was a major economic contributor in 2007, the San Juan Islands Visitors Bureau trumpeted a state report that tourism contributed $127.1 million to San Juan County's economy in 2007.

According to the study by Dean Runyan Associates, visitor spending increased by $6 million over 2006.

The study states:

— Visitors account for over 27 percent of all state and local tax dollars generated in the county.

— 41.4 percent of all local sales and lodging tax dollars stay in San Juan County to support local services. Only two counties (Pacific and Skamania) retain higher percentages in their own communities.

— Direct tax receipts to San Juan County generated by travel spending totaled $8.9 million in 2007.

A breakdown of the top five expenditures shows that in 2007 visitors spent:

— $39.5 million on food and beverage services
— $34.2 million on lodging
— $19.7 million on arts, entertainment and recreation
— $17.8 million on retail sales
— $7.9 million on food stores

Overnight guests accounted for more than 80 percent ($102.4 million) of total visitor spending, in clear support of the data showing that visitors who stay longer outspend day trippers by a significant percentage. Day visitors spent $24.7 million.

In addition, the eight-year period of 2000 through 2007 shows a 5.7 percent average annual increase for San Juan County, placing the county No. 8 of 39 counties statewide and above the state average of 5 percent for the same time period, the study states.

The complete statewide study can be viewed at www.experiencewashington.com/industry. Click here.

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