Strong vehicle sales in August played the biggest role in keeping consumer spending on an upward trend in Colorado Springs, according to the a report on sales tax collections from the city's Finance Department.
Sales tax collections in September, which are based on sales made in August, rose just 2 percent from a year earlier to $10.8 million, the smallest year-to-year gain since January. Still, the August increase brought the number of consecutive monthly increases to 21.
Nearly three-fourths of the monthly gain was generated by collections from auto dealers, which were up 12 percent from a year earlier. The number of new vehicles registered in August with the El Paso County Clerk and Recorder's Office was up 22.3 percent from a year earlier, to 2,088.
Fred Crowley, senior economist for the Southern Colorado Economic Forum, said consumer spending nationwide slowed during the summer as consumer confidence declined, local housing construction leveled off and flooding in Manitou Springs kept some tourists away from the Colorado Springs area. But consumer confidence has rebounded as the national economy is producing more jobs and incomes nationwide are creeping up, all of which should mean a strong holiday selling season, he said.
"The prospects for the upcoming holiday season are good," Crowley said.
Sales tax collections so far this year are up 6.5 percent from the same period a year ago to $82.4 million.
Use tax collections, which is collected on manufacturing equipment, building materials and other items bought outside the city, are up 12.7 percent for the year.
Combined sales and use tax collections in September edged up just 1.2 percent from a year earlier to $11.4 million and are up 6.9 percent so far this year to $88.2 million. That total doesn't include special sales taxes for public safety, trails and open space and tourism, which total nearly $25 million.
When adjusted for inflation, combined sales and use tax collections this year are the highest since 2007, according to Finance Department calculations.
Why it's important: Sales and use tax collections fund more than half of the city's 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: Besides auto dealers, the categories with the largest percentage increase from a year ago were business services, up 17.5 percent; furniture, appliances and electronics, up 11 percent; and grocery stores, up 8.8 percent. Industries with the largest percentage declines were commercial machines, down 41 percent; utilities, down 5.8 percent, and department and discount stores, down 5.6 percent.
Medical marijuana: Sales tax collections from marijuana businesses in September jumped 13.2 percent from a year ago to a record $126,948, and so far this year are up 26.4 percent from a year ago to $883,628.
Tourism tax: September collections of the city's tax on hotel rooms and rental cars were up 5.3 percent to $515,504 and so far this year are up 4.4 percent to $2.84 million.
Contact Wayne Heilman: 636-0234 Twitter @wayneheilman
Facebook Wayne Heilman