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July 2016 hailstorm dents Colorado Springs sales tax revenue in September

October 12, 2017 Updated: October 12, 2017 at 5:03 pm
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Police Sgt. Kory Dabb accesses the damage to the fleet of police cars at the Stetson Hills police station Friday morning, July 29, 2016, after a Thursday night hail storms damaged more than two dozen vehicles. (The Gazette, Christian Murdock)

A hailstorm in July 2016 put a dent in Colorado Springs sales tax revenue in September.

That's because sales tax collections surged in September 2016 after residents bought replacement vehicles the previous month in the wake of the massive storm on July 28, 2016. This year, collections from auto dealers declined 37.3 percent, or $753,298. Collections from all other sources increased 1.6 percent.

The $13.3 million collected in September, which reflects sales made in August, fell 4.1 percent from September 2016, the first monthly drop in two years and the biggest decline since collections fell 9.9 percent in June 2009, the city's Finance Department reported late Wednesday. However, collections for the year are still up 6.9 percent from the same period last year to $103.5 million.

"This isn't economic. All other local economic indicators remain strong," said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. "People are delaying purchasing cars, in part because vehicles are lasting longer but also because technology is changing so quickly with electric, hybrid and driverless vehicles."

The 2 percent sales tax is a key revenue source for the city, funding more than half of its budget that pays for public safety, parks and other basic services. The performance of the tax also is a barometer of the local economy and is closely watched by business and city officials as well as economists.

Other highlights of the September sales tax report include:

- Revenue from hotels and motels rose 12.2 percent, the most of any retail category, while miscellaneous retail rose 7.7 percent and grocery stores were up 6.7 percent. Besides auto dealer collections, revenue from business services fell 12.6 percent and department and discount stores were down 10.4 percent.

- The city's tax on hotel rooms and rental cars rose 5.9 percent to $777,623, the smallest monthly gain since June 2016. However, collections of the so-called bed-and-car tax so far this year are still up 14.9 percent from the same period last year to $4.65 million.

- The city's use tax - collected on equipment and machinery bought outside the Springs - fell 27 percent from September 2016 to $616,494, the biggest percentage monthly drop since a 36.8 percent decline in March 2014. Use tax collections so far this year are up 4.2 percent from the same period a year ago to $5.7 million.

- Collections from the city's road repair sales tax in September fell 3.4 percent from September 2016 to $4.32 million. The tax has raised $33.8 million so far this year, up 8.2 percent from the same period in 2016. Voters approved the tax in November 2015, and it took effect on Jan. 1, 2016.

- Revenue from special sales taxes for public safety and trails, open space and parks in September fell 5.4 percent from September 2016 to $3.49 million, but are up so far this year by 6.8 percent to $27.3 million.

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Contact Wayne Heilman: 636-0234

Twitter @wayneheilman

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