Already strong consumer spending in Colorado Springs shifted into overdrive in June, with hotels and restaurants joining the party as the city’s recovery from the COVID-19 pandemic continued to gain traction.
Revenue from the city’s 2% sales tax in June, which came from sales in May, surged 30.4% from June 2020 — when many businesses were just reopening from a stay-at-home order — to $17.7 million, according to a Colorado Springs Finance Department report. This June’s total was up more than 25% from June 2019, which was well before the pandemic.
“This is remarkable, even when you compare it to 2019,” Colorado Springs Mayor John Suthers said Monday. “The economy is really hitting on all cylinders, and even tourism is doing great though conventions have been slow to recover. Vacationers are here in big numbers, construction is continuing at a tremendous pace and restaurants are doing well — the only thing holding them back is being able to hire enough people. I don’t see anything slowing this down.”
More than half of the increase came from miscellaneous retailers — which includes online sales and such businesses as sporting goods stores, pet supply stores and jewelry stores — along with hotels and restaurants.
Sales tax revenue from hotels was up 434% from June 2020, while restaurants were up more than 60%. Miscellaneous retail sales jumped 53.7% during the same period.
Another key indicator of tourism activity — the city’s tax on hotel rooms and rental vehicles — jumped more than 300% from a year ago, when some of the city’s biggest hotels were closed. The total was also up nearly 7% from June 2019.
“Colorado Springs is ahead of the rest of the state and nation in recovering from the pandemic, and that is reflected not only in sales tax numbers but also in airport passenger numbers, housing construction and several other indicators,” said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. “Colorado Springs is seeing growth across many industries, and a lot of people are moving here.”
The city levies a 2% sales tax on consumer and business purchases of vehicles, appliances, business machines and many other items. The tax is a key economic indicator and funds more than half of the city’s general fund that pays for public safety, roads and other services. The city also collects special sales taxes for public safety, road repair and trails, open space and parks that combined to total $9.83 million in June.
Other details from the sales tax report:
• Revenue in June from the city’s use tax, paid on equipment businesses buy outside the city, rose 13.6% from June 2020 to $682,126. So far this year, use tax revenue is up 19.3% from the same period last year to $3.79 million.
• Overall sales and use tax collections in June were up nearly 30% to $18.4 million and so far this year are up 31% from the same period in 2020 to nearly $86 million.
• Among other retail categories, sales from clothing stores were up more than 80% and 10 categories tracked by the city posted gains in June from a year earlier. Revenue from medical marijuana dispensaries, grocery stores and commercial machines dealers was down.