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SALT LAKE CITY (AP) -- Utah experienced its single largest increase in sales tax revenues in more than a decade last year, according to a new report.
Economists said it's a strong sign that wages are up, and tourism and business spending are performing well, and will likely to continue to rise, although at a slower rate.
The state's sales tax revenues increased by 11.1 percent to $3.9 billion in 2005 -- the largest single-year growth since 1993 -- according to an Office of Legislative Research and General Counsel report.
Larger increases in sales tax revenue have only occurred three other times in the past 25 years.
"Given the rarity of such a high rate of growth, the rates of increase will likely slow down in 2006," the report said.
The past year was a banner year for economic growth in Utah and gave legislators more than a $1 billion budget surplus. The state's job growth of 3.5 percent was more than double the national average. Legislators will meet again this spring to discuss cutting $70 million in taxes. The surplus already prompted lawmakers to reduce the sales tax on food by 2 percentage points.
Salt Lake, Utah and Washington Counties made up 65 percent of sales tax revenues, but only Washington County was among the 10 counties experiencing the fastest rates of growth.
Daggett County, which saw its state sales tax revenues increase by 150 percent, led the state in growth. Along with Juab County, Daggett County has consistently outpaced the rest of the state with an average growth rate of more than 20 percent since 2000.
The report said retail sales made up 46 percent of all sales tax revenues, but other industries also showed strong growth. That includes transportation, mining, business services and construction.
Much of the economic growth in the past year can be attributed to the state's growing population, economists said. In 2005, Utah was the fifth-fastest growing state in the nation. The largest single in-migration of new residents in the state's history also helped spur a $6.4 billion construction boom in 2005, according to an economic report to the governor. Most of that construction, $4.5 billion worth, was residential.
Construction spending is expected to increase 7.4 percent this year.
In the past year, Kennecott Land announced plans to develop 75,000 acres in the West Bench area of the Oquirrh Mountains over the next 50 years. Fully developed, it would be twice the land area of San Francisco and home to about 500,000 people.
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On the Net:
Sales Tax Report http://www.le.state.ut.us/lrgc/briefingpapers/taxbrief2006.pdf
(Copyright 2006 by The Associated Press. All Rights Reserved.)
