Colorado Springs sales and use tax revenue plunged a record 21.8% in April from the year before — but the drop was only about half of what city officials had feared.
Sales and use tax revenue are critical for the city, paying more than half the cost for public safety, roads, parks, and other public services. April marked the first full month of business closures and other stay-at-home restrictions set by the state to stem the spread of the coronavirus. Because of that, city officials were anticipating sales tax revenue would fall by as much as 40% from a year earlier.
Our modeling had indicated a 40% drop, so where we go from here depends on how quickly everything opens back up. If we have two more months like this, we would have a problem. We see May as being closer to March (down 13.1%) and the rest of summer down 5-10%.
Collections from the city’s sales tax were down 22.8% to $10.8 million, the biggest percentage drop in records dating to 1977, and the smallest monthly total in more than four years. Revenue so far this year is off 9.1% to $48.9 million. Revenue from the city’s use tax paid on equipment and other items bought outside the city rose 2.3% to $617,329, one of the few bright spots in an otherwise dismal report.
For more information: Colorado Springs GazetteColorado Springs gazette
BY Wayne Heilman
June 10, 2020