June 13, 2017 Updated: June 13, 2017 at 5:11 pm
Colorado Springs sales tax collections slowed in May to the smallest gain since August but continued a trend of 20 consecutive monthly increases from the same month a year earlier.
The $12.3 million collected last month, which reflects consumer spending in April, was up 7.1 percent from May 2016, with more than half the gain coming from the homebuilding, lodging and restaurant industries. Just a month earlier, sales tax revenue jumped 16.2 percent from April 2016 in the biggest monthly gain since December.
Sales tax collections have risen every month since October 2015, including eight consecutive months with double-digit increases,; they’re up so far this year by 11.6 percent from the same period last year to $48.2 million.
Revenue collected in May from the city’s special road repair tax, which started last year, was up 8.7 percent from May 2016 to $4.04 million. The tax has generated $15.8 million so far this year, up 13.5 percent from the same period last year.
“I think we’ve gotten a little spoiled lately. This increase is still pretty good,” said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. “These numbers aren’t really telling us anything different from the previous month. We still have good momentum; the increase just isn’t as much as previous months.”
All but three of the 14 retail categories tracked by the city increased from May 2016, with hotels and motels up 28.7 percent, building material dealers up 21 percent and grocery stores up 17.2 percent. The only declines were in business services, down 18 percent; auto dealers, down 4.6 percent, and department and discount stores, off 0.9 percent.
Other highlights from the report:
– Revenue collected in May from the city’s tax on hotel rooms and rental cars continued to reflect a booming tourism industry, surging 22 percent from May 2016 to $492,094. Revenue from the tax so far this year is up 20.4 percent from a year ago to $1.57 million.
– Use tax revenue – collected on the sale of equipment and machines elsewhere but used in the city – totaled $771.265 in May, up 28.4 percent from May 2016. Use tax collections so far this year are up 6.4 percent from the same period in 2016 to $2.92 million.
– Medical marijuana tax revenue in May totaled $164,055, up 9.6 percent from May 2016, and so far this year is up 14.3 percent.
The sales tax report is a key indicator of the city’s economic health; sales tax collections generate more than half the revenue that pays for public safety, parks and other services from the city’s general fund. The city also collects special sales taxes for public safety and parks and open space that totaled $3.26 million in May and $12.8 million so far this year, increasing at the same 11.3 percent rate as the city’s sales and use tax collections.
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