As the COVID-19 pandemic and related business restrictions continue to loom over local economies, Douglas County leaders are keeping a close eye on indicators such as sales tax revenue as the figures …
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As the COVID-19 pandemic and related business restrictions continue to loom over local economies, Douglas County leaders are keeping a close eye on indicators such as sales tax revenue as the figures become available.
From January through May, the county’s sales tax revenue, which depicts how much local buying is happening, was up nearly 6% compared to the same period last year, according to county data.
“We were all kind of expecting a big decrease,” said county budget director Martha Marshall.
Even with the early increase in revenue, Marshall wouldn’t draw any conclusions about the future impact of the virus on the county’s economy, she said.
“It’s way too early to understand what the coming months will look like,” she said. “There are too many variables to understand what direction it will take in the future.”
Douglas County’s month-to-month data for this time period compared to last year shows just how difficult finding a trend can be. In January, the county saw a 15.5% increase in sales tax revenue compared to 2019 and in February, a 12.9% increase. Growth slowed in March, however, as the pandemic and mandated shutdowns reached Colorado. The county saw only a 7.7% increase that month compared to March last year, followed by an 8.7% decrease in April.
In May, sales tax revenue began to grow again, though at a slower pace. The county saw a 4.5% increase compared to May 2019, according to the data.
When the county looked into where the increases were coming from, officials found upticks in areas like online, home improvement and warehouse sales — meaning stores like Costco and Sam’s Club.
And as far as the county’s budget goes, it’s unclear what impact the coronavirus will actually make.
“We’re actually holding our own right now because February and January came in so strong,” Marshall said. “We’re very close to what we budgeted.”
The county’s sales tax revenue is split between three areas: public safety, transportation and roads and open space.
The Town of Parker, which receives even more up-to-date information than the county, has seen an 8.3% increase in sales tax revenue from January to July compared to the same period last year, according to a county spokesperson.
The town’s original budget included a 2% growth rate for sales tax revenue over the year compared to 2019, said town finance director Mary Lou Brown in an emailed statement. However, when the pandemic first arrived, the town reduced their entire budget by 25% as a “worst-case scenario,” she said.
“Based on year-to-date numbers, we expect to exceed the original budget as well as the adjusted budget,” she said.
In a town report for the year up to April, Parker showed a year-to-date increase of 4.45%, showing a slight uptick compared to the previous year’s time period, which had a 3.98% increase.
“During the months of March and April 2020, consumers were purchasing goods in preparation for staying at home which is most likely the main driver in the increase,” according to the report.
In Castle Rock, sales tax revenue from the start of the year through May was up by 2.3%.
“The pandemic’s impact on specific industries in Castle Rock has been a mix,” said spokeswoman Mellisa Hoelting.
Apparel sales in the town went down 47% and restaurant and bar sales went down 14%, Hoelting said. However, online retailers are up 30 to 50%, home and garden stores and grocery stores are up about 20% each, she said.
“We anticipate that March and April will be the worst months impacted, assuming no other shutdowns, with May being slightly better,” she said. “Moving forward, we anticipate the rest of the year to be stronger.”
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