Below is the link to the June interim agenda.
ULCT Economist Doug Macdonald reviews the numbers for the state of the local, national, and global economies in this month’s economic review and forecast.
May’s distribution came out today at $45.62 million, up 3.0% from last year’s $44.31 million (Table 1). This distribution represents monthly returns from March sales and first quarterly sales in 2013. It follows a 4.0% gain in February and a 15.3% jump in January sales. For the first quarter of 2013, the statewide growth ran 6.9% ahead of last year.
Nationwide, March retail sales and food services posted a 1.5% gain over the prior year.
Another important milestone occurred when we seasonally adjust the May distribution to $42.24 million, it is only 0.5% lower than the peak distribution of May 2007 at $42.44 million (Chart 1).
Two major cities saw gains of more than 10% in May — Sandy at 10.5% and St. George at 11.7% (Chart 2). Both of these cities’ fiscal year-to-date growth rate are close to 10%. Sandy’s growth may be partially due to the large sporting goods store opening this year. St. George’s may be due to a hot construction market and a resumption of fast-desert, long-term growth.
Three other cities demonstrated better than average growth: West Valley (up 6.6%), West Jordan (up 5.6%), and Tooele (up (6.8%).
Salt Lake City’s growth rate all but stalled for March sales, but its 6.5% year-to-date growth indicates strength from its City Creek and other recent developments.
Soft growth, between 0 and 4% was the rule in cities in Utah, Davis and Weber counties. Park City’s distribution took a serious dip, down 15.4%.
If trends continue, expect the first month of the new quarter, June’s distribution for April sales to pick up.
During the May interim a variety of topics were discussed. We have attached a link below to a summary of the issues that were discussed.
April’s 1% local sales tax brought in a total of $34.66 million statewide, up 4% over the same period last year. April’s distribution represents February 2013 sales. Following a 15% month (January sales) the 4% growth for February sales may not be surprising.
A better metric would be to look at the last 3 month’s growth rate, which is up 7.3% for the statewide local sales tax. Fiscal year-to-date growth of 6.6% right on with our forecast of CY2013.
Draper’s 14.1% growth led the other major cities we track. South Jordan’s 11% increase placed second. Salt Lake City’s distribution increased 4.8%, slightly ahead of the State’s 4% growth.
Bountiful and Layton, had increases similar to Salt Lake City.
Farmington’s distribution increased nearly 9.6% (Station Park mall), very close to Lehi’s 10% (commercial & retail growth) and St. George’s 10.3% (housing rebound) growth rate.
Below is an attachment for the Legislative meetings that will be held during the Interim. Now that the Interim schedule has been made public we will finalize our LPC schedule shortly.
The Tax Commission’s revenue report was released yesterday and a few data points may be worthwhile to note.
First, state sales taxes, which were running 4.1% ahead last month, fell by almost 1% to 3.2% growth for the first three quarters of the fiscal year. This may mean that sales tax distributions might be negative in ten days. Due to the large earmarks of state sales taxes to transportation, the monthly numbers are not as indicative of trends as they once were. So, I totaled all sales taxes (28 total) for the month and at $191 million, they were down 11.5% compared to the same month last year. Distributions may therefore be down between 6% and 12% this month (they were up 15% last month).
Second, individual income taxes, which were up 12.1% last month, dropped to 10.2% growth this month. This is consistent with what Tax Commission and Legislative Fiscal Analyst economists thought might happen as refunds processing is now catching up to normal. Still, 10.2% growth, which may eventually drop between 6% and 8% is good news.
Third, corporate franchise tax growth also fell, but is still very high at 42.1% through the first three quarters of fiscal year 2012-13.
Finally, motor fuel taxes fell 0.4% through the first three quarters. This pretty much flat growth is consistent with the fact that Utah’s automobile and truck fleet is becoming more and more efficient as new, higher mpg models are added each year, while more inefficient, older models are scrapped. It also underscores the plight of cities (and UDOT), who need a growing revenue source, not a flat one, to fund their roads.