The bottom has fallen out of state sales tax revenues, clear down to city level, as the economic meltdown that hit consumers in October is showing up on government ledgers.

And Denver's mayor plans to propose a local "economic stimulus" package to combat the recession's effects in the metro area.

Colorado sales tax took a 6.7 percent nose dive in October when compared with the same month a year ago.

Many Colorado governments and public agencies who rely on sales tax revenue are also taking the hit. A few cities report increases, but the number with decreases is significant.

RTD, which operates transit services in metro Denver, took a 6.3-percent drop in October.

The city of Denver came out only slightly better, with a 4.3-percent decline from a year earlier, the first month to come in under 2007 revenue levels

Governments are drawing up cutback plans to prepare for closing out this year and dealing with whatever 2009 brings.

"We put a budget cutback plan in place for 2008 and we're working on a budget management plan for 2009," said John Gross, Aurora budget director "And there's not going to be a government around that isn't doing that."

The next state revenue forecast is due out from Gov. Bill Ritter's administration next week, looking ahead to the new year.

"The economy is sliding backwards and when that happens, revenue into governments also decline," said Evan Dreyer, Ritter's spokesman. "Absolutely, we are expecting declines in all the revenue categories and we've taken a number of steps to cut back. We've built as much flexibility into the budget as possible."

Mayor John Hickenlooper said the city plans to announce a local economic stimulus plan later this week to address the recession in the metro area, just as national leaders prepare a stimulus plan for action after Barack Obama takes office in January.

Hickenlooper said the city is meeting with business leaders to come up with the plan.

"Through coordinated strategies around job retention and creation, housing stabilization, access to capital and more, we hope to minimize the impact of the national recession on Denver, its business community, its workforce and our city budget," Hickenlooper told city employees in a letter Wednesday.

"National trends are not indicating significant improvements for the coming months, and the decline in sales tax revenues will likely continue into 2009 as most major industry sectors are seeing large decreases nationwide," Hickenlooper told city workers.

Sue Cobb, the mayor's spokeswoman, said Denver is looking to avoid layoffs and service cuts.

"Everyone's goal has been to minimize the impact of these challenges on staff and services," she said.

Colorado collected $161.3 million in sales taxes in October. That compares with $172.8 million from a year earlier.

October figures are the most recent available. November results won't be released until next month.

At RTD, where sales taxes make up 60 percent of the operating budget, collections from October sales were off last year's mark by nearly $2.2 million.

"October knocked us down," said Terry Howerter, RTD's chief financial officer. "It has a huge impact on us and it keeps snowballing. We're hoping we can hold that and come in where the prior year was."

Staff writer Hector Gutierrez contributed to this report.

Sales tax hits

From the state to the city level, October retail sales fell significantly compared with October 2007. Lakewood's report was an island of black amid the red ink:

* Colorado Down 6.7 percent

* RTD Down 6.3 percent

* Denver Down 4.3 percent

* Aurora Down 0.5 percent

* Lakewood Up 1.9 percent

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