Part of the media’s role, especially in our case following the local business scene, is trying to anticipate big stories — positive or negative — before they happen. That way we’re ready and know how to respond.
Such was the case last week as the calendar informed us that a normally mundane item of monthly news was coming. But this time, there was reason to wonder what we’d learn from the latest report of sales-tax collections in Colorado Springs, because the August report would cover collections submitted by businesses in July from their transactions for the month of June.
We all remember June, the month that went from hot and dry to catastrophic, when the Waldo Canyon fire struck on the 23rd and shut down a large portion of the city — not to mention nearly all of the region’s vital summer tourism — for more than a week.
That led to a deep concern, shared quietly by many Colorado Springs leaders, that we might feel nasty economic after-shocks. Besides businesses being threatened (and many were) by loss of revenue during and after the fire, the city also faced the possibility of a sharp, unplanned dip in sales-tax collections. As much as we have chosen to depend on sales taxes as opposed to property taxes for funding local government, any noticeable decrease could have major ramifications, not just now but for the city’s developing 2013 budget.
Late last week, the city’s report came. And the news was excellent — actually historic.
The total in sales tax for June’s “economic activity” came to $10,766,942, up nearly $238,000 or 2.26 percent from July 2011. For this year, that puts the city at $60.47 million for combined sales and use tax.
That number is significant, in part because it’s more than 5 percent higher than 2011, but also because it’s already over $60 million for the first half of this year.
Colorado Springs hasn’t topped $60 million at this point since, well, ever. We checked with the city’s sales tax manager, Karen Garcia, to make sure we had an apples-to-apples comparison. She supplied monthly numbers back to 1996 for sales and use tax. Garcia does point out that the tax revenue per capita was higher around 1999-2000, with the population lower.
But for the first six months of any year, the combined sales and use tax never had surpassed $60 million — until now. The closest had been 2006 and 2007, pre-recession, both at more than $59 million.
Some pessimists might warn that next month’s numbers, reflecting economic activity for July, still could bring a negative surprise. But we don’t share that feeling.
From our view, the city returned quickly to normal, many businesses began to recover, and we’ve heard many anecdotal stories from people affected by the fire who received insurance payments quickly and began spending them on living expenses (for those displaced from their homes) or for major household furnishings (for those whose homes could be saved).
Those should be good signals for the local economy. Yes, the city government and Colorado Springs Utilities still have to bounce back from their unexpected expenses due to the fire. But the flow of sales-tax revenue has not been interrupted, which means the city still is on track for a good year.
Actually, let’s call it a history-making year.