May 22, 2024

Sales and entertainment tax revenue didn’t show growth on a year-over-year basis in Sioux Falls last month.

Sales tax revenue was essentially flat — up 0.1 percent in April — which largely represents sales in March.

The comparison was tough, though, because “we started last year out with a bang,” director of finance Shawn Pritchett told the Sioux Falls City Council on Tuesday. “We were coming off a fairly significant month of April of last year, so it’s difficult to grow off of that.”

The May report might show something similar, but this summer could bring a better environment for positive year-over-year growth because the last five months of 2023 were more lackluster, “where we really saw the compression of that growth rate within the sales fund,” he said.

“Hopefully, we’ll see some return in upward swing … as we get into the third and fourth quarters.”

Year to date, sales tax revenue is up 3.1 percent.

The entertainment tax also was flat for the month, though sales at restaurants were up 5 percent. For the year, it’s up 6.7 percent.

By sector, manufacturing was down 18 percent year over year in April, and lumber was down 7 percent. Home furnishings and legal services also showed declines. Department stores were up 8 percent.

Sales tax from gas stations is up 37 percent over the past five months.

“We’ve seen a lot of gas stations opening in our community over the course of the last year, so we’re seeing a little bit of that happening as those gas stations continue to be added to the community,” Pritchett said.

The lodging tax showed a year-over-year drop of 14.1 percent but might be an issue of some timing given the large increase the previous month, he said.

“Overall, you can see it wasn’t a particularly strong month.”

Inflation at 3.4 percent “continues to be stubborn,” he said. “Food prices overall, on the plus side, have become much more consistent at 2.2 percent.”

Everything except food and energy is still at a 3.6 percent inflation rate — “higher from what we would like to see from an optimal standpoint, economically,” Pritchett said.