(The Center Square) – The new year is here, but municipalities still need to finish collecting taxes from the last one. Spokane County is no exception, with sales tax revenue still 1.4% behind initial projections.
Municipalities typically collect taxes each quarter, with the most recent data available through October 2024. Randy Bischoff, senior director of Finance & Administration, presented those numbers to the Board of County Commissioners on Monday, detailing some trends.
The December report through October showed that the county’s sales tax revenue was 1.4%, or $1.1 million, behind the $79.3 million it anticipated generating by then. The county collected $6.9 million last month, 4.6% more than December 2023, but annual growth is only about 1%.
Bischoff is still waiting on data through the end of the holidays but previously told the board that the county probably won’t meet its 2024 goal until the end of 2025. They budgeted a 2% sales tax growth for last year. After only reaching half of that, Bischoff budgeted another 1% for 2025.
“December was a very light month for retailers,” Bischoff explained. “I think we saw a push that moved up the Christmas season into October and November, so I expect we’ll probably still see a good November, and then I think we’ll see a lighter-than-normal December.”
Jason Metcalf, a management and budget analyst, said Spokane County averaged a 4% sales tax growth from 2000 to 2023, but it could take some time to reach that again. Still, he argued that consumer optimism is high, meaning people feel their financial position could soon improve.
However, according to The Conference Board, that’s not the case. The nonprofit research firm tracks a Consumer Confidence Index, or CCI, which reflects feelings about spending and future economic conditions. Last month, after a steady October and November, the CCI dropped.
“The recent rebound in consumer confidence was not sustained in December as the Index dropped back to the middle of the range that has prevailed over the past two years,” Chief Economist Dana M. Peterson wrote in a press release. “Compared to [November], consumers in December were substantially less optimistic about future business conditions and incomes.”
Metcalf provided data that split the tax revenue into three categories: retail trade rose by 1% year-over-year, construction dipped by 4%, and accommodations & food services followed suit.
He said increased housing costs reduce people’s spending capacity on taxable goods, causing them to spend “more cautiously” as many large employers continue layoffs into 2025. However, the Federal Reserve also anticipates reducing rates this year, which could spur spending.
“One thing that’s good for Spokane in particular is U-Haul just came out with a list of the top move-to areas,” Metcalf said. “We ranked 24th for metro areas, which is really good unless the U-Hauls are just getting stolen here, and they can’t return them.”
