Colorado Springs consumers started 2013 in a big way, boosting spending at local retailers in January by the biggest percentage in more than 12 years, according to a report Wednesday on sales tax collections from the city’s Finance Department.
February sales tax collections, which were based on sales in January, were up 18.42 percent from a year earlier, to a record $9.24 million for the month. The year-over-year increase was the largest since a 29.8 percent surge in November 2000 and the 14th consecutive monthly rise from the same month a year earlier. The big gain in February’s collections came after a weak increase of just 0.15 percent in January, though the comparison with a year earlier was distorted by a jump in one-time audit revenue during January 2012.
“This reinforces what the other local (economic) indicators are showing — that the local economy is improving and is really a reflection that the local economy is recovering,” said Fred Crowley, senior economist for the Southern Colorado Economic Forum.
Use tax collections in February — collected on manufacturing equipment, building materials and other items bought outside the city and used in the city — fell 43.42 percent from a year ago to the lowest level in nearly a year. However, when one-time audit revenue is excluded from the comparison, use tax collections were actually up by 44.53 percent. Combined sales and use tax collections in February were up 12.46 percent from a year ago to $9.71 million. Without audit revenue, the increase would have been 19.39 percent.
When adjusted for inflation, combined sales and use tax collections for February were the highest since 2007, according to calculations from the Finance Department.
The sales tax collection gains were widespread with nearly every industry reporting double-digit gains, including a more than doubling of collections on sales of commercial machines and a 91.31 percent surge in spending on business services. Collections from grocery stores and hotels and motels also were up by more than 20 percent.
There were two categories with only single-digit gains: restaurants, up 2.42 percent, and auto repairs and leases, up 5.55 percent. Although housing construction is surging, collections on building materials were down 10.83 percent.
Sales and use tax collections fund more than half of the city’s annual budget for police and fire protection, roads and other services. Sales tax also is a primary measurement of consumer spending, making it a key barometer of the local economy.
Sales tax collections on medical marijuana businesses in February jumped 52.72 percent to $94,345, but were down 11.47 percent from the previous month. The monthly collection totals for the industry have fluctuated between $94,000 and $112,000 since August.
February’s collection of the city’s tax on hotel rooms and rental cars was up 9.3 percent from a year earlier, the fourth consecutive monthly increase after three straight months of declines in the wake of the Waldo Canyon fire.
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