Construction boom fuels another big month for Colorado Springs sales tax revenue

Nov. 16--A booming construction industry, likely triggered by two summer hailstorms, helped to fuel another big month for Colorado Springs sales tax receipts in October.

Collections of the 2 percent tax on building materials sales jumped 18 percent, or nearly $300,000, to $1.86 million and generated more than 40 percent of the overall increase, a report from the city's Finance Department said. October sales tax collections, which reflect transactions in September, rose 8.3 percent from October 2017 to $15.8 million.

Hailstorms on June 13 and Aug. 6 triggered more than 14,600 homeowners insurance claims totaling more than $110 million, according to the Rocky Mountain Insurance Information Association.

"The local economy is doing really well, and sales tax is a reflection of that. The numbers tell me that the local economy is outperforming the national economy by a wide margin and has been for the past several years," said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum.

All but three of the 15 retail categories tracked by the city increased in October from a year earlier with the only declines in medical marijuana, utilities and miscellaneous retail, which includes online sales. Besides building materials, categories that cover auto repair and leases, business services, commercial machines and grocery stores also rose by double-digit percentages during the same period.

Sales tax receipts have been up every month this year by at least 4 percent and this year have increased 7 percent from the same period last year to $125.3 million.

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 increased 6.6 percent from October 2017 to $761,245. The total this year is up nearly 7 percent to $5.73 million.

-- Revenue from the city's use tax -- paid on equipment and machinery bought outside the Springs -- fell 36.6 percent from October 2017 to $880,090, the highest total this year. The decline stems from the October 2017 total of $1.39 million that included several large purchases and was the highest monthly total since January 2008.

-- Receipts from the city's road repair sales tax in October were up 4.5 percent to $5.17 million and so far this year have increased 6.6 percent to $41.3 million.

-- Overall sales and use tax collections in October rose 4.4 percent from a year earlier to $16.7 million and so far this year are up 6.6 percent to $133.3 million. Those totals don't include $4.17 million in special sales taxes for public safety, trails, parks and open space collected in October and $33.3 million collected so far this year.

Contact Wayne Heilman: 636-0234 Facebook www.facebook.com/ wayne.heilman

___

(c)2018 The Gazette (Colorado Springs, Colo.)

Visit The Gazette (Colorado Springs, Colo.) at www.gazette.com

Distributed by Tribune Content Agency, LLC.