City: Sales Tax Revenues on the Rise

If you’ve noticed parking lots at local malls seem a little busier, you’d be correct. And, if it seems like more people are out shopping and actually buying rather than window-shopping, you’d also be right on target.

Sales tax revenues in Naperville are up, and not only are more people shopping in town, they are also spending time in local bars, restaurants and hotels, according to a official.

“Sales tax revenue is up 11 percent over last year for the last 10 months,” said Karen DeAngelis, city of Naperville finance director. “This is a tremendous sign of progress, as it has changed the trend from the prior two years where almost every month was lower than the prior year.”

Higher consumer spending is reflected in several areas, DeAngelis said in an e-mail: the 11 percent increase in sales tax revenue, as well as a 7 percent increase in hotel tax and 5 percent increase in food and beverage tax.

 The sales period reflected in the numbers was for the 10-month period from February 2010 to November 2010.

“So [the] February 2010 shopping month seems to be the start of the recovery of retail sales in Naperville,” DeAngelis said. “Since that time every month has shown a increase of at least 4 percent above the prior year, with the average increase being 11 percent.”

Among the trends that were visible in the numbers was an increase in automobile sales. DeAngelis said auto transactions account for 30 percent of retail sales in Naperville. Based on the details available for the first half of 2010 sales were up 10 percent, a major contributor to the increases the city has seen in sales tax revenue collections.

John Schmitt, CEO, said that major purchases, like buying a car, are driven by peoples’ attitudes. If they are feeling good about their employment, they will make a significant purchase.

“We have heard that the sales tax is up about 11 percent from the city and it does show a sign of recovery and that consumers are spending more, which is a strong engine to drive the recovery,” Schmitt said. “There are still struggles out there but we are seeing a lot of people experiencing growth and expansion.”

Along with the increase in retail sales, Schmitt said local restaurants are reporting that business is up and doing well.

DeAngelis said that sales tax revenue has been more than $2 million a month for 10 of the last 12 months. 

In 2010 the best months for sales were in February, April and September. Those three months had the highest improvement with each showing more than a $200,000 increase (more than 10 percent) above the same month in the prior year. 

While things appear to be looking up, Schmitt said business owners continue to be cautious.

“I am optimistic,” he said. “I think we’ve seen the worst and we still have challenges. But we are optimistic to meet those challenges.”