Pueblo city, county sales tax collections continue to rise

Pueblo city and county sales taxes collections continue to climb amid the nation's 8% increase in inflation this year.

The city of Pueblo is reporting a 5.7% increase in its 3.7% sales and 3% use tax receipts for the first eight months of 2022, “and last year was a record year, so to be up over that is something,” said Nick Gradisar, Pueblo mayor. Pueblo’s sales tax collections topped out at $81.6 million in 2021, a hearty 27.7% increase above 2020 figures.

So far this year, the city has collected $56 million in sales tax with three months remaining.

Pueblo County Finance Director Ashley Huggins also is reporting an increase in the county’s 1% sales tax collections so far this year, at 6.7% above the first eight months of 2021. The county has collected $20.46 million in sales tax through August, up from $19.1 million during the first eight months of last year.

The months of March and April were the toughest for both Pueblo and Pueblo County. The city saw a 3.6% and 5% decrease from the prior year in those two months while the county experienced a .82% decrease and a .78% increase in March and April, respectively.

Big months were registered in February for the county, which realized a 16.69% increase, and January for the city, which realized a 13.1% increase in sales tax collections.

With the United States inflation rate sitting at 8.2% for the past year, reflecting cost of living increases on everything from housing to goods like food and fuel, it might seem surprising that Pueblo sales tax rates are doing so well. But consumers haven't yet tightened their purse strings enough to cause a decline in tax receipts.

“It does not surprise me,” Gradisar said. “It shows the sustained economic activity that Pueblo has.”

Gradisar said the city’s 2022 budget was based on an estimated 3.5% increase in sales tax and several city administrators thought that was too optimistic.

"But it is holding so far," Gradisar said. "September will be a big month with the Chile Fest and Gravel Locos events bringing in lots of people to spend money in Pueblo."

The ups of Pueblo’s sales tax revenues

In Pueblo, the “good increase in sales tax collections for online sales both in and out of state,” is probably due in part to a new electronic collection system, Gradisar said.

“The system is working better and it’s easier for remote sellers to submit sales tax payments,” the mayor said.

Collections from out-of-state vendors increased by nearly 24 % in August. Sales tax collection areas that were all above 100% when compared with last August include contractors, auto parts stores, equipment rentals and insurance.

Department stores reported a nearly 15% increase in sales tax collections through August this year when compared to last. The Dillon Drive area, which includes the Pueblo Mall and the Eagleridge Shopping Center as well as Walmart and Home Depot, reported a 6.76% increase.

Cara Fitzgerald of Centennial, which oversees the Pueblo Mall, said sales were up in September as well, so the trend is continuing.

The geographical location that realized the largest sales tax increase in August was the Grove neighborhood near the Runyon Field Sports Complex. Sales tax collections bloomed to $130,303, up from $75,119 last August.

More on the economy:Colorado Latino voters surveyed say state should address economy and cost of living

The downs of Pueblo’s sales tax revenues

The hardest-hit industry this year appears to be retail marijuana. Retail marijuana cultivation collections plummeted 70.24% from the same time last year and retail marijuana sales plummeted almost 28%.

“I think a lot of that has to do with the price. The growers are telling me the prices have dropped dramatically and they can’t make any money with indoor grows because of the utility costs,” Gradisar said.

Gradisar said the retail marijuana trade has realized a downward trend in the last year as competition is driving prices down. The marijuana business also is “maturing a little bit and we don’t have the sales we had in the beginning,” he said.

One perplexing trend so far this year is a drop in lodging tax collections. Year-to-date collections are down 1.3% compared with the first eight months of 2021.

Last year was a banner year for lodging tax collections, marking a 51.7% increase when compared with 2020 collections, so the lodging industry might just be evening out.

The biggest drop of 22.4% in lodging tax collections came in July. August lodging tax collections were down 8.5%, which surprised Gradisar considering that coincided with the Colorado State Fair.

“I am not sure what that’s about, but I would expect it will be up in September. The lodging tax seems to be sort of an anomaly,” Gradisar said.

The geographical location that suffered the biggest downturn in August was Hyde Park near the Chavez-Huerta preparatory schools, which recorded a 60% drop in sales tax collections. Collections were down from $6,508 in August 2021 to $2,590 this year.

Gradisar said he hopes the city's overall upward trend will continue.

“We will take advantage of it and put it to good use,” he said.

One of the ways the city took advantage of last year’s sales tax boon was to pour $10 million, or double the usual budgeted amount, into road improvements.

More Pueblo economic news:Is Pueblo becoming a buyer's market? Residential real estate sales dropped 29% in September

Chieftain reporter Tracy Harmon covers business news. She can be reached by email at tharmon@chieftain.com or via Twitter at twitter.com/tracywumps.

This article originally appeared on The Pueblo Chieftain: Pueblo city, county sales tax collections continue to rise