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The meaning of the city's sales tax | Chuck Parrish
Want a little excitement in your life? Well, then, let’s talk sales tax revenues!
A comparison between 2011 and 2012 shows us how the local economy performed relative to the previous year. Revenues in 2012 did not match the improvement that we experienced in 2011 which was approximately $15.3 million. New construction revenues were down significantly. Through the first three quarters, 2012 sales tax revenues from other sources bumped along at lower levels than the previous year. In the fourth quarter, we started to see improvement and November was much better than the previous year (not new construction). Numbers are not available for December yet. The best that could be said for 2012 is that sales tax revenues were sub-par but more or less steady and improving, especially in the last quarter of the year.
A comparison between what was budgeted and what was received is perhaps more important. If we don’t receive what we expect and budget for, we may have a problem. The final quarter numbers have not been collected yet. Based on the first three quarters, it is anticipated that total sales tax revenues will exceed budget by just over 2 percent. This is testimony to a good fiscally responsible budget process.
There were some bright spots. Total Wine and More, Bev Mo, Big Lots and Sears Outlet stores opened and will have a positive economic impact. Store openings in existing locations are called TI or tenant improvements. Absorption of prime locations will eventually drive up lease rates and likely lead to new construction but not this year. Housing starts have modestly increased. In 2013, the Aviation High School project continues. The Tukwila Village project and the King County Library project, an element of Tukwila Village, is moving along; we may even see some groundbreaking later in the year.
More good news. According to the Colliers International Research & Forecast Report, the South King County area is experiencing an exceptionally strong industrial recovery. Demand for office space is growing as customers move south in search of more competitive rates.
The Puget Sound Economic Forecaster anticipates over 5 percent growth in the Puget Sound region for 2013. This was also projected for 2012. It does not always work out. Among other factors, superstorms, legislative immobility at the federal level and declining numbers of public employees have a de-stimulative effect. But let’s be positive!
The City Council and the administration have done well dealing with this Great Recession. It is not the time for austerity measures. The city should continue to seek out ever-diminishing grant opportunities and advocate for new taxing authorities from the state Legislature.