Robyn and Louisa's Blog

Retail sales boost Arizona's economic outlook

Retail Sales Boost AZ's Economic Outlook

It looks like Arizona consumers are finally releasing the stranglehold on their wallets, at least for some things. New figures Monday from the Joint Legislative Budget Committee show merchants paid the state $282.2 million last month in basic sales taxes. That does not include the proceeds from the temporary one-cent hike in the tax rate which voters approved last May. That is nearly $4.3 million higher than the same time a year earlier. The big boost was in retail sales, the purchase of taxable items, which was up 4.8 percent in the last year. But the legislative budget staffers said sales at bars and restaurants also was up 2.0 percent from the prior October. Sales taxes are a key indicator of consumer confidence. Monday’s tax receipt figures are not the only indication the economy is improving. The state Department of Commerce reported last week that the number of people working in retail trade in October was up by 7,000 from a year ago. And employment in the leisure and hospitality industry, including bars, restaurants and hotels, is up by 3,300. Monday’s report also found a significant increase in individual income tax collections. At this time of the year, that largely indicates money withheld from worker paychecks. But budget staffers said this nearly 20 percent hike may not mean that more people are working. They pointed out that the state altered the way employees compute their withholding for state taxes. What may be happening, they said, is workers are having their employers take out more than is necessary. That means the money is really only on loan to the state, as employees will get that money back when they file their tax returns next year. The other bright spot for the state, at least in terms of revenues, is that Lottery ticket sales are up about 6.6 percent from October 2009. None of this means, though, that state government is out of the financial woods yet. The report says while tax receipts are up from last year, they still are lagging behind the projections used when lawmakers put the budget together. For the first four months of the fiscal year, total collections are $41.2 million below forecast, even with the $261.3 million extra received so far from that one-cent sales tax hike. Source: http://www.eastvalleytribune.com/business/article_51ce6960-fc15-11df-a4c3-001cc4c03286.htm

Posted at 03:27PM Dec 09, 2010 by Louisa Ward & Robyn Viktor in General  |  Comments[0]