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February 2010 taxable sales only fell 1.6%; good news given that half of the monthly distributions the last six months have been -12% or lower. -Utah League of Cities and Towns
SALT LAKE CITY -- Improving, but slowly. That's what one snapshot of Utah's economy shows.
It's based on brand new figures from local sales taxes, car sales and construction.
This is definitely a good news, bad news report. The good news is that things like car sales and housing are moving in a positive direction. The bad news is, the economy still has a big hole to dig out of.
When the economy is chugging along, it shows up in consumer spending -- money that generates sales taxes.
March percent change in housing units authorized
|State||% change 07-08||% change 08-09||% change 09-10|
According to a new report from the Utah League of Cities and Towns, taxable sales were down just 1.6 percent for the most recent month. That's a clear improvement from the prior six months.
Local governments, like Salt Lake City, are cutting budgets and adjusting to the "new normal" of smaller sales tax revenues.
"We are seeing a leveling, which would be fantastic," said Lisa Harrison-Smith, spokesperson for Mayor Ralph Becker. "We would be thrilled to see that compared to last year, which was definitely a plummet."
Utah auto sales dropped -21.1% in 2008 and -28.1% in 2009, but the 2010 forecast is up 10% from 2009. -Utah League of Cities and Towns
State Budget Director John Nixon said, "We're seeing that the economy has hit bottom, and we are seeing signs of growth."
Take, for example, car sales, which are worth more than $350 million in Utah taxes in a good year. Utah auto sales were down 21 percent from the prior year in 2008 and down 28 percent last year.
But that's starting to turn: The forecast for 2010 is up 10 percent from a dismal '09.
"So we see that the consumers are starting to spend money," Nixon said. "They're having confidence in the economy and we certainly project that these things are going to increase. Hence, we do see recovery taking hold."
Sales tax revenue for Utah's cities and towns has been lower than the previous year in 23 of the last 24 months. -Utah League of Cities and Towns
The report finds construction activity -- including residential -- is slowly improving, too. New housing permits show a solid upturn of 29 percent from last year for March 2010, after two tough years.
Utah's drop in construction since its peak has been less than many other states, while overall home values have remained stronger than most other regions.
So what is the recovery likely to look like? Economists predict that, both locally and nationally, it's likely to follow a jagged path, with more peaks and valleys to come.