Consumer spending in Colorado Springs, as measured by city sales tax revenue, rebounded in July despite numbers that were inflated last year by a major hailstorm and the U.S. Senior Open golf tournament.
Collections of the city’s 2% sales tax in July, which reflects sales in June, rose 3.4% from July 2018 to $16.7 million, recovering from a less than 1% drop in June from June 2018, according to a report from the city’s Finance Department. Sales tax revenue this year is up 4.4% from the same period a year ago to $84.5 million.
Tom Binnings, senior economist for Summit Economics, a local research and consulting firm, said the July total “exceeds expectations, especially considering the challenging comparisons with a year ago. It is consistent with the national economy, where consumers are carrying the day despite business confidence sputtering.”
The four-day golf tournament in June 2018 generated an estimated $30 million in economic impact, while the June 13, 2018, storm triggered more than 17,000 auto insurance claims totaling $104 million.
The gain came despite a 15.8% drop in collections from auto dealers and a 20.5% fall in sales tax on business services, both from a year earlier.
The dollar value of those declines was more than offset by a 13% increase in other collections, a 10.7% increase in tax paid on building materials and a 38% jump in revenue on sales of commercial machines.
The city levies a 2% sales tax on purchases other than food and prescription drugs, funding more than half of city government for public safety, parks and other services. The city also collects special sales taxes for roads, public safety and trains, open space and parks as well as use tax on equipment and machinery bought outside the city.
Other highlights from the report:
• The city’s sales tax on hotel rooms and rental vehicles — a key tourism barometer — rose just 1.4% to $904,810. However, collections in July 2018 jumped 8.2% from a year earlier as a result of the Senior Open. Revenue this year from the tax is up 8.3% to $3.42 million.
• Collections of the city’s road repair sales tax in July rose 3.2% from July 2018 to $5.43 million and are up 3.9% this year to $27.6 million.
• Revenue from the city’s use tax edged up less than 1% to $827,086 and is off 4.7% this year to $4.42 million.