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The way sales tax collections are going, Salt Lake County's economy should be back to pre-recession levels by the end of this year.
County financial officer Lance Brown told the County Council on Tuesday that sales tax receipts for the first 11 months of 2012 were 7.1 percent above the same period a year earlier. Even if the rate of growth slows to 5 percent in 2013, as projected, the county's overall bounty from seven sales taxes should surpass 2008's peak by late fall.
"That's a five-year interval to get back to where we were before," Brown said, emphasizing how long it has taken for the county to bounce back from the economic shock waves released by the collapses of the housing and financial systems in 2007 and 2008.
Sales tax collections in Salt Lake County peaked at $49.6 million in the 12-month period running March 2007 through February 2008. Two years later (March 2009 through February 2010), they bottomed out at $40.8 million — an $8.8 million loss that brought employee compensation cuts and streamlined service delivery.
The total for the 12-month period ending Nov. 30 was back up to $47.4 million, and Brown is projecting sales tax revenues will reach $50.2 million in 2013.
Budget-office projections have been accurate. Actual sales-tax collections through the end of November were 0.6 percent above the forecast, delivering an extra $650,000 into the county treasury. The year-to-date comparison to 2011 is more impressive, the 7.1 percent increase yielding an additional $7.8 million.
Every type of sales tax is up. The quarter-cent county option sales tax, which raises twice as much revenue as any of the others ($42.7 million through Nov. 30), is up 7.2 percent. The next biggest revenue producer, the local option tax, is up 13 percent.
Although taxes on hotel rooms and rental cars had lagged to 2011 levels earlier in the year, Brown noted that both were in positive territory at November's end.
Rebounding sales tax revenues prompted Democratic Councilman Randy Horiuchi and Republican Councilman Michael Jensen to theorize about returning to the Legislature in 2014 to talk about raising the county option sales tax another quarter-cent. In exchange, property-tax revenues would be decreased a commensurate amount.
While the change initially would be revenue neutral, the greater reliance on sales tax would increase the county's ability to deal with inflation, Jensen and Horiuchi agreed. They negotiated a similar agreement with legislators several years ago.
"Sales tax captures growth in a more truthful and beneficial way to us than property tax," Horiuchi said, adding that it also makes big families more accountable for their impact on the system. "If a guy has 15 kids, he's paying his fair share in sales taxes."
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