Sales tax collections in Colorado Springs hit a record high in July, buoyed by solid consumer and business spending and a local economy that continues to improve.
Tourists who visit the Springs, visitors and locals who eat at restaurants and home construction are among the area's economic drivers and propelled sales tax figures, said Tatiana Bailey, director of the Southern Colorado Economic Forum.
"Gas prices are low and we continue to have solid employment," she said. "People are going out and coming to our community and vacationing here. All of that is very positive."
Tom Binnings, a senior partner in Summit Economics, a local economic research and consulting firm, said revenues from discretionary purchases such as clothing were good signs. At the same, building material and motor vehicle sales were pluses.
"Consumers are in a good consumption mode and buying things they had been holding off on like clothing and miscellaneous retail," Binnings said. "They're sustaining growth in the other arenas like restaurants and auto dealers and that sort of thing. Overall, it's a good sign that the local economy continued its robust progression."
A report this week by the Colorado Springs Finance Department, which tallied July sales tax revenues based on June spending, showed:
- Collections generated by the city's 2 percent sales tax - used to fund basic services in the Springs' general fund budget - totaled a record of almost $14.8 million in July or 11.8 percent higher than the same month a year earlier. The percentage increase was the largest since an 18.3 percent gain in February 2013. That portion of the sales tax doesn't include special levies for public safety, trails, open space and parks.
- While July's year-over-year percentage increase was strong, it was helped by a surge in business service revenue - one of several retail categories tracked by the city. Business service revenues, which can be volatile, nearly quadrupled in July to almost $1.3 million. Without that increase, July's tax revenue gain would have been less than 5 percent. A single company's strong sales drove business service revenues, said Kara Skinner, the city's chief financial officer.
- Of other retail categories, grocery store revenues rose 22.5 percent; hotel and motel sales were up 19.1 percent; clothing climbed 11.9 percent; auto repair and leases gained 7.5 percent; building materials rose 4.2 percent; and auto dealers gained 2.5 percent. Department and discount stores fell 16.6 percent, and furniture, appliances and electronics dropped 5.4 percent.
- On Jan. 1, the city began collecting a voter-approved, 0.62 percent sales tax for roads. July was its best month so far, raising $4.8 million. Year to date, it's brought in $22.7 million for roads; city officials had said they expect it to average $50 million annually.
- The city's tax on hotel rooms and rental cars brought in $711,755 during July, or 18.7 percent more than a year ago.