Retail Figures For Area Show Economic Pain

Here it is the middle of the fourth quarter and we’re finally getting first-quarter retail sales tax figures from the State Revenue Department for Spokane.

Maybe it’s just as well. The numbers only confirm what our eyes and ears have been telling us all along - sales are sagging.

This is the first time in at least half a decade, if memory serves right, that the dollar volume of taxable retail sales in the city and county of Spokane has slipped.

It’s been a rip-roaring five years of booming retail growth. A period of growth that made this one of the most torrid retail development hot spots in America.

But true to the law of gravity and California real estate, what goes up must come down.

On the face of it, the percentage drop in dollar volume isn’t all that sizable - just under 3 percent in the city and 1 percent countywide.

But, adjusted for inflation, the downturn is more like 6 or 7 percent in the city, and 4 or 5 countywide. That’s substantial and it’s significant.

Either the Spokane economy is experiencing a serious economic downturn.

Or consumers hereabouts are simply running out of buying power because of low wages and poor benefits.

Or other regional retail centers are winning away market share.

Within the city limits, sales were off almost $18 million from last year’s total of $604 million in the first quarter, the state’s figures show.

Countywide - including the city - sales were down just $8 million from the year-earlier total of $981 million.

The state Revenue Department doesn’t break out sales statistics for areas of the county outside the city limits. But obviously, if the above data are dependable, areas of the county outside the city notched a $10-million sales increase.

Downtown sales figures also are not split out from the city total, but evidence of a dramatic downturn is inescapable.

Moreover, the consensus seems to be that sales aren’t improving, but heading the other way, downtown and around town.

This ought to tell the citizens of Spokane something: The health and vitality of downtown is important to everyone no matter where they live and pay taxes - city and county. Local government, faced with budget shortfalls and in the process of whacking services to make ends meet, are becoming ever-more-painfully aware of this fact.

City and county officials have watched as retail sales receipts, hotel-motel room taxes, and real estate excise tax collections tumbled from last year’s levels.

If downtown’s decline continues, other bases of revenue will be adversely affected. And all who live in the Spokane community will pay more.

Shades of the slowdown were already visible in sales figures for last Christmas.

The dollar value of fourth-quarter sales in the city and the county combined edged up only 1 percent. Factoring in inflation, that translates into a loss of 2 or 3 percent, in contrast to a year-earlier spurt of 15.1 percent.

Last year, first-quarter sales were even more explosive - up 17 percent.

CNN’s panel of experts on consumer income and debt reports wages and benefits rose just 2.7 percent last year - the smallest increase in 14 years.

One-fifth of wage earners’ income goes directly to pay debt. Consumer borrowing has reached a record high.

According to one member of the panel, “People are starting to use credit cards as the new unemployment insurance.”

In response to the alarming rate at which consumers are piling on credit card debt, banks are hiking their charge card interest rates by up to 100 percent, reports Bankcard Holders of America,

If holiday shoppers aren’t careful, cautions the nonprofit consumer organization, they can end up getting socked by penalty rates of up to 25 percent.

“Consumers are damned if they do, and damned if they don’t,” declares executive director Ruth Susswein. According to the her, at least one bank boosts rates if a card holder charges what the bank deems to be “too much,” while other banks cancel card holders if they don’t charge ‘enough.’

Some consumers reported the interest rate on their credit card was doubled, from 12.9 percent to 24.9 percent, because they made “too many” charges on - get this - another bank’s credit card.

, DataTimes MEMO: Associate Editor Frank Bartel’s column appears on Monday, Wednesday and Sunday.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review