Early numbers aren’t looking good for Spokane and other local governments hoping to avoid more budget gloom.
Sales tax distributions for the first two months of 2010 were the lowest since 2005 for Spokane, Spokane County, Spokane Valley and the Spokane Transit Authority.
Because of the increased cost of doing business, largely from of salary increases and the spiking costs of health insurance, local governments usually need rising tax revenue to maintain services with the same number of employees.
Sales taxes are only one source of revenue, but they are a signficant one, especially for STA, which doesn’t have property or utility taxes.
In the middle part of the decade Spokane was on an incredible ride, but the recession has wiped out much of the gain. In fact, Spokane is now collecting fewer sales taxes than it did in 2001 if you consider inflation.
Inflation has risen about 22 percent since 2001. The City of Spokane’s sales tax revenue, at least in the first two months of the year, is up only 16 percent in the same period.
Sales tax distributions lag two months behind their actual collection from customers, so January and Feburary distributions generally were collected in November and December. Officials hope to see a spike next month relating to the U.S. Figure Skating Championships held in January.
Now, a few notes on the graphic:
1. STA’s tax revenue spiked in 2005 because voters approved a higher rate.
2. Spokane Valley didn’t start collecting sales taxes until 2004 after voters agreed to incorporate the city.
3. Spokane County’s collections dipped significantly in 2004 as a result of Spokane Valley’s vote to become a city.