Sales tax. Papers on the office table.

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Consumer spending in the Colorado Springs area rebounded slightly in September from a decline in August, according to the latest sales tax revenue report from the Colorado Springs Finance Department.

The city’s sales tax revenue in October, which reflects September sales, rose 1.4% year over year to $16 million after a decline in September that stemmed mostly from an inflated total in September 2018. Vehicle sales surged in August last year after hailstorms in June and August, according to the Colorado Automobile Dealers Association. Those storms triggered more than 38,000 auto insurance claims totaling $230 million.

Hail No: 2018 storm triggers decline in Colorado Springs sales tax revenue

The reason September revenue was nearly flat: Gains from grocery stores and business services slightly more than offset declines in building materials and commercial machines. Although nine of 15 industry categories measured by the city rose last month from a year earlier, six declined and three others were up less than 2.5%. The biggest gain came from the “all other” category.

Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum, said the flat revenue reflects other local and national economic indicators that have leveled off.

Colorado Springs consumer spending remains strong in July

“I’ll take that. A few months ago, I was concerned about a recession, so for the economy to hold steady — that is better than a decrease or a recession,” Bailey said. “There is some concern (about the economy), but no one is slamming on the brakes.”

Sales tax revenue so far this year is up 3.8% to $131.1 million. Another source of city revenue — use tax collected on machinery bought outside the city — declined 6.9% to $819,409. That is the fifth decline this year, resulting in use tax revenue so far this year dropping 7.1% from a year ago to $6.54 million. Use tax collections can be volatile and have fluctuated widely so far this year.

The city levies a 2% tax on purchases other than food and prescription drugs, funding more than half of city government for public safety, parks and other services.

Colorado Springs sales tax revenue rebounds in July after June decline

The city also collects special sales taxes for road repairs, public safety and trails, open space and parks as well as a tourism tax on hotel rooms and rental cars. The “bed-and-car” tax in October fell 3.3% from a year ago to $736,265 — the first decline since April 2018 — while the road repair sales tax rose 1% during the same period to $5.22 million.

Contact Wayne Heilman 636-0234 Facebook Twitter

Contact Wayne Heilman 636-0234



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