hail cars 2 (copy)

A mix of vehicles are being temporarily stored on the city’s east side after two destructive hailstorms. Sales tax collections in August 2019 fell as a result of the storms inflating vehicle sales in August 2018.

Colorado Springs consumers didn’t quite spend enough in August to overcome a huge decline in vehicle sales from a year earlier, when a July hailstorm inflated the next month’s total.

The city’s sales tax revenue in September, which reflects August sales, fell just $24,224, or 0.2%, from a year earlier despite a decline more than 10 times larger in collections from auto dealers, according to report from the city’s Finance Department. Storms on June 13 and Aug. 6 triggered more than 38,000 auto insurance claims totaling $230 million, according to the Rocky Mountain Insurance Information Association.

Colorado Springs consumer spending remains strong in July

The reason the September decline wasn’t much bigger — nearly every other category of sales tax revenue increased, including a $144,316 increase in collections from restaurants. Four other categories — department and discount stores, hotels and motels, grocery stores and medical marijuana dispensaries — each increased by at least $49,700. Building materials was the only other major retail category to fall.

“So far, so good. Local consumers remain optimistic,” said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. She pointed to a September survey from Colorado Springs-based Elevated Insights that found consumer sentiment in Colorado Springs remains strong, especially the outlook for 12 months from now, which she said was significantly better than the rest of the nation.

However, another source of city revenue — use tax collected on equipment and machinery bought outside the city — plunged 26.3% to $628,562. Use tax collections can be volatile and have fluctuated widely so far this year — up more than 16% in February and April and down 46.5% in March. Year-to-date use tax collections are down 7.1% to $5.72 million from a year ago.

Colorado Springs sales tax revenue rebounds in July after June decline

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 taxes for road repairs, public safety and trails, open space and parks as well as a tourism tax on hotel rooms and rental cars.

Other highlights:

Reason for concern in Colorado Springs? Key figure declines for first time in 18 months

• The “bed and car” tax was up just 1.3% to $898,022, the smallest gain this year. This year, the tax has generated $5.31 million, up 6.7% from a year ago.

• Revenue from the city’s road repair sales tax in September fell 1.5% from September 2018 but this year remains up 3.6% to $37.4 million.

Contact Wayne Heilman 636-0234

Facebook www.facebook.com/wayne.heilman

Twitter twitter.com/wayneheilman

Load comments