Consumer spending in Colorado Springs remained strong in May, according to a report on sales tax collections from the city's Finance Department.
June sales tax collections, based on sales in May, were up 7.22 percent from 2012 to $10.5 million, the 18th consecutive increase from the same month a year earlier. The gain was broad-based, with all but three of the 13 industry categories monitored by the city reporting increases from a year ago - including five by double-digit percentages.
Collections so far this year are up 8.22 percent from the same period a year ago to $49.6 million.
"Consumer confidence is quite strong right now. Consumers are feeling good about the local economy because they are seeing employment and income growth," said Fred Crowley, senior economist for the Southern Colorado Economic Forum. "I expect sales tax numbers to remain strong for the balance of the year, including a strong holiday season."
Use tax collections in June - from manufacturing equipment, building materials and other items bought outside the city - were up 21.09 percent from a year ago to $625,326, but would have declined without revenue resulting from audits of merchants, which reveal additional tax obligations.
Combined sales and use tax collections in June were up 7.92 percent to $11.1 million.
Year-to-date collections of sales and use taxes are up nearly 9 percent to $53.2 million. When adjusted for inflation, combined sales and use tax collections so far this year are the highest since 2007, according to calculations from the Finance Department.
Why it's important: 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.
The breakdown: Industry categories with the largest percentage increase in June from a year earlier were business services, up 28.41 percent; building materials, up 27.28 percent; and utilities, up 15.3 percent. Industries with the largest percentage declines were department and discount stores, off 9.11 percent; commercial machine dealers, down 1.02 percent; and clothing stores, down 0.35 percent.
Medical marijuana: Sales tax collections on medical marijuana businesses in June rose 20.27 percent from a year earlier to $109,234, the fourth consecutive month such collections have totaled more than $100,000. So far this year, collections from sales of medical marijuana are up 31.38 percent to $528,770.
Tourism tax: June collections of the city's tax on hotel rooms and rental cars were up 5.66 percent from a year ago, the biggest monthly gain since February. Bed-and-car tax collections so far this year rose 2.96 percent to $1.31 million.
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