SIOUX FALLS, S.D. (KELO) – After a rough month in July, the city’s sales tax revenue for August increased by 7%, which is the largest sales tax growth the city has seen in months.
According to Director of Finance Shawn Pritchett during an informational meeting on September 17 to discuss the city’s finances, the city went from -3.7% in July to 3.4% for August.
“It is the largest growth we’ve seen month over month since March,” Pritchett said.
Despite the large increase from July to August, Pritchett said that it would still be difficult to hit their tax collections goal for the year. Currently, the city’s annual sales tax growth is sitting at 1.9%. They are still hoping to reach 3% tax growth for the entire year.
Under sales tax revenue, industries like manufacturing, lumber, wholesale and utilities have taken hits across the nation in the last few years, Pritchett said.
“Looking at the sales tax numbers over the last three years, we’ve seen reduced growth coming off the post-pandemic surge and with economic lays that followed that,” he said.
Also during the meeting, Pritchett said the city’s unemployment went down to 1.6% in August compared to 1.8% in July.
“We’re continuing to see that extremely low (percentage), even though you do see a little bit of an uptick nationally, up to 4.5%, in the month of July,” Pritchett said
The city’s inflation rate also decreased from 2.9% in July to 2.5% in August. Pritchett said it is the lowest it’s been in three and a half years.
Sioux Falls is sitting at around $689.9 million in building permit valuations. Pritchett said that was $36 million, or 5%, less than this time last year. The new residential sector is up by 18% driven by increases on single-family housing. However, the total is still down 32% from where it was two years ago.
