Posted: Feb 13, 2013 7:57 AM by Maddie Garrett
Updated: Feb 13, 2013 8:27 AM
Encouraging signs that the Colorado Springs economy is improving are found in an important benchmark, sales and use tax revenue, an indicator of how much money people are spending. The latest results released Tuesday are the best since before the recession in 2007.
From consumer spending to building homes, things are looking up. Economic expert and UCCS professor Fred Crowley said January's sales and use tax revenues are the best he's seen in a while.
"The good news for November and December especially, use taxes, which is the tax that businesses pay on things that they buy, increased very strong compared to last year," said Crowley. "And these are very strong indicators they will be hiring someone to work on the things they just finished buying."
Overall the combined 2% sales and use tax revenues are up by $6.8 million, that's 5.6% from 2011 to 2012. The totals: 2012 had $128.7 million compared to 2011 with $121.8 million.
"That's a very strong indication the economy is recovering," explained Crowley.
Crowley points to the top three month-over-month percentage increases:
Building materials, up 26%
Auto dealer, up 20%
Hotel-motel, up 11%
"When we see building materials going way up like this, it's a very strong indicator of several things: people have the means to borrow, they want to expand, they want to build new homes, and building creates tons of jobs," said Crowley.
The top three decreases were:
Business services, down 42%
Commercial machines, down 22%
Utilities, down 11%
But Crowley said you can't get too carried away with the negative numbers.
"Some of the decrease in demand isn't really a decrease as much as a more efficient use of resources," he explained.
So with all of up-sides to the city's report, are we back to the booming days before the recession?
"I'm not quite sure, we're not at that point yet. Particularly with respect to local employment, employment has a ways to go yet. But retail activity seems to have stabilized and is coming back," said Crowley.
Another interesting increase, medical marijuana sales tax revenues, which is up 42% from last year, to $1,095,915. Crowley said since 2009, those numbers have increased ten-fold and is only expected to grow for the city in the coming years.
And in Pueblo, sales tax revenues increased 2% in 2012, after remaining relatively flat in 2011. Auto sales and construction materials continue to lead those sale numbers, although Pueblo's city manager said the local economy remains relatively weak.