Steamboat Finance Director Projects Slower Sales Tax Growth for 2027

Steamboat Springs —Steamboat Springs Finance Director Kim Weber stood before City Council last Tuesday, July 21, and laid out a budget that was less of a celebration and more of a reality check. She proposed starting the 2027 sales tax budget at $40.6 million, a figure roughly $300,000 lower than the current budget year. The city is already tracking about $463,000 below its 2026 revenue projections.

It is a sobering preview for a community that has grown accustomed to steady, robust increases. Weber’s numbers suggest 2027 could be the city’s slowest-growth year for sales tax in nearly a decade.

"Sales tax makes up 60-67% of the general fund budget," Weber told the council. "So a 1% change in what that projection is, changes that balanced budget quite significantly."

The part everyone skips past when looking at the big picture is how we got here. In the 2010s, Steamboat saw steady yearly increases of 5-6% in sales tax revenue. That growth dipped to 2% by 2020, a logical regression during the pandemic’s economic squeeze. Then came the post-COVID boom: huge jumps in 2021 and 2022 as visitors returned. Since 2023, however, those increases have settled into a narrower band of roughly 2-3%.

Weber’s 2027 projection isn’t exactly conservative, nor is it aggressive. It sits in the middle, driven by expected inflation and a better snow year than the 2025-26 season. Yet, there is a new variable complicating the numbers: smoke.

Earlier in that same meeting, Councilor Amy Dickson raised her hand with a specific concern. She pointed to recent wildfire activity and its potential to dampen summer tourism, a factor Weber immediately acknowledged.

"We talked about how we would pivot if we reached 10% down," Weber said, noting that current collections are still in the 2-3% down range. "But what Councilor Amy Dickson talked about earlier on the wildfires is quite concerning from a marketing perspective."

It’s not that downtown Steamboat is currently choking on ash. The air quality is fine for walking around. It’s what people are hearing on the news that matters. Weber noted that while the environmental impact is manageable, the marketing message might be sending visitors elsewhere. This concern is reflected in yet-to-be-released collection numbers for June and July, which are currently holding steady but carry the weight of that external uncertainty.

The composition of that sales tax tells its own story. Miscellaneous retail accounts for the largest slice at around 23%, followed by lodging at 21% and restaurants at 16%. The rest is a mix of construction, utilities, sporting goods, liquor, and marijuana sales. If tourism takes a hit due to wildfire perceptions, lodging and retail feel the pinch first.

Weber’s presentation sets the stage for a formal budget passage in October, but the message is clear: growth isn’t guaranteed. It’s earned, month by month, sale by sale.

Stand there long enough and you can see the shift. The era of double-digit recovery is over. What remains is a careful balancing act between inflation, weather, and the lingering shadow of smoke on the horizon.