Two summer hailstorms showered the city of Colorado Springs with cash in September as sales tax collections jumped 13.7 percent, the most in nearly 1½ years, as consumers bought replacement vehicles for those totaled in the June and August storms.
Collections of the 2 percent tax from auto dealers more than doubled to $2.76 million, meaning dealers sold nearly $140 million in vehicles in August. September sales tax collections reflect transactions in August. Without collections from auto dealers, overall sales tax revenue would have risen just 4 percent, according to a report from the city’s Finance Department. The 13.7 percent increase to $15.2 million was the biggest percentage gain since a 16.2 percent jump in April 2017.
The June 13 and Aug. 6 storms triggered more than 38,000 auto insurance claims totaling $230 million, according to the Rocky Mountain Insurance Information Association.
All but two of the 15 retail categories tracked by the city increased in September from a year earlier with declines in just medical marijuana and miscellaneous retail, which includes online sales. Auto repairs, building materials, business services, commercial machines, department and discount stores and grocery retailers all had double-digit percentage jumps during the same period.
“In keeping with our very strong economy and our continuing trend of record tourism, we saw very healthy returns for the September collections,” Mayor John Suthers said Friday in an emailed statement. He credited strong growth in tourism revenue for part of the increase but also noted “car sales increased drastically due to damaging hailstorms, which, while stimulating to the economy, is not how we like to generate funds.”
Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum, said the gains from the hailstorms amounted to “borrowing from the future. A lot of people are paying deductibles now and many more will pay higher insurance rates in the future, which will reduce disposable income. It just isn’t productive.”
The 2 percent sales tax generates more than half of the city’s revenue used for public safety, parks and other basic services, and economists consider sales tax numbers a key barometer of the local economy.
Other report highlights:
• Collections from the city’s tax on hotel rooms and rental cars jumped nearly 14 percent to $886,320. The total so far this year was up 7 percent to $4.97 million.
• Revenue from the city’s use tax — paid on equipment and machinery bought outside the Springs — surged 38.3 percent to $852,528, the third double-digit increase in the past four months. The total so far this year was up 7.9 percent from a year ago to $6.16 million.
• Receipts from the city’s road repair sales tax in September were up 14.8 percent from a year ago to $4.96 million and so far this year have increased 6.9 percent to $36.2 million.
• Overall revenue from sales and use taxes in September increased 14.8 percent from September 2017 to $16 million, and, so far this year, was up 6.9 percent to $116.7 million.
Those totals don’t include $4 million in special sales taxes for public safety, trails, parks and open space collected in September and $29.2 million collected so far this year.
Contact Wayne Heilman: 636-0234 Facebook: www.facebook.com/ wayne.heilman