Colorado Springs sales tax receipts last month saw their biggest percentage increase in more than a year, buoyed by healthy consumer and business spending on motor vehicles and building materials, among other key retail categories.

A city government Finance Department report released Wednesday showed the Springs collected nearly $19.2 million in December from the sales tax it levies on the purchase of TVs, appliances, furniture, clothing, cars and other items.

Those revenues, which reflect spending that took place mostly in November, rose by 7.1% when compared with the same month a year earlier — the largest year-over-year gain since a 7.9% jump in September 2022.

Sales tax revenues are critical for the operation of Colorado Springs city government because they pay for more than half of the city’s general fund budget, which includes spending on parks, roads, public safety and other services.

Interest rates that edged downward late in the year led to reduced borrowing costs and made major purchases more affordable, which might have contributed to increased spending and a boost in sales tax revenues, said Charae McDaniel, the city’s chief financial officer.

“Some of the (retail) categories that we saw increases in for this month compared to the same month of the prior year were those big-ticket items,” McDaniel said. “For example, auto dealers, building materials and furniture and fixtures. Those categories really have been trending down for a number of months. Now, we finally are seeing a month-over-month increase in those.”

In December, tax collections from the sale of building materials rose 15.7% to almost $2.8 million when compared with the same month a year earlier, the Finance Department report showed. Motor vehicle sales generated $1.9 million in revenue, up 6.1% on a year-over-year basis. Furniture, appliances and electronics gained 1.3% to nearly $1.4 million.

Other retail category increases included: auto repair and leases, up 11.3% to $744,541; miscellaneous retail (online sales, sporting goods stores and pet supply shops, among others), 10.2% to $3.4 million; clothing stores, 8.1% to $721,106; restaurants, 5.6% to $2.5 million; and hotel/motels, 4.7% to $725,548.

Despite those increases in December, year-to-date city sales tax revenues remain essentially flat, McDaniel said.

For the first 11 months that make up the city’s annual sales tax reporting period, revenues totaled $214.7 million or 0.6% higher than the same time a year earlier, according to the Finance Department report.

As a result, Colorado Springs’ sales tax revenue forecast for 2024 went unchanged from 2023, and some spending areas were reduced for this year to allow for expenditures elsewhere in the city budget, McDaniel said.

“I’m very pleased that these (retail) categories and the overall sales tax has now moved into a positive direction on that month-to-month comparison,” she said of the December report.

“But really, we’re barely into the positive on the year to date. So that really keeps me in a cautious frame of mind as we look out into 2024.”

Other highlights of the city’s December sales tax report include:

• Use tax revenues for the city climbed 9.2% to $751,667. The city’s use tax is levied on out-of-town purchases of equipment and machinery used inside city limits. Year to date, use tax revenues total $9.7 million or 1.3% higher on a year-over-year basis.

• Revenues from the city’s separate tax on hotel rooms and auto rentals totaled $568,904 in December, up 1.8% compared with the same month a year ago. So far this year, the lodging and auto rental tax has brought in $9.5 million or 1.8% higher than the same period the previous year.

Colorado Springs monthly sales tax revenues jumped by 7.1% in December, the biggest percentage gain since a 7.9% increase in September 2022, a new city Finance Department report shows. Despite the increase, year-to-date city sales tax revenues remain essentially flat.

the Associated PRess file