Local Sales Tax Revenue Continues Steady Growth By Tomoya Shimura, Staff Writer | 15-Jan-2012
After several years of plummeting income, Victor Valley cities are finally experiencing some relief as they saw a steady upward trend in sales tax revenues during 2011.
"For the cities, they live on sales tax revenues. Any increase gives them more money to spend on services to the residents like parks and streets," Victor Valley College economics professor and former Apple Valley Mayor Peter Allan said. "Sales taxes are really the lifeblood of the city. When sales tax revenues drop, they have to start thinking about how they would reduce the services."
Apple Valley saw its sixth consecutive quarter of year-over-year sales tax revenue growth in the third quarter of 2011. The third quarter sales tax collections went up 4 percent from 2010 and the second quarter saw a 9.5 percent increase. Hesperia generated increased sales tax revenues during each of the first three quarters in 2011 compared to the previous year. The total revenues in the first three quarters of 2011 were $5.62 million, a 24.7-percent increase.
During the third quarter of 2010, Victorville had its first quarter-overquarter increase in four years. The city saw the revenues grow every quarter since then. Allan said Victorville probably benefited from recovery in car sales in the area.
Adelanto's sale tax revenues dropped in 2010 but bounced back in 2011. The fourth quarter of 2011 saw a 38.5-percent year-over-year increase.
The unemployment rate in the High Desert has dropped for four straight months to 14.9 percent in November, according to data released by the Employment Development Department.
"Any 1 or 2 percent decrease in unemployment contributes to sales tax revenues," Allan said, because more people have money to spend.
He said consumers tend to buy big ticket items when they feel optimistic about the economy.
"Whether it's a short term aberration or longterm progress, I can't give you an answer to that," Allan said. "But when people start spending more, it's great for the cities. ... I would hope that this is a sign that the people are optimistic that the economy will be improving."