IB Sales Tax Revenue Climbs, Yet Growth Remains Slow

Sales tax revenues rose once again in Imperial Beach, but experts say economic growth will continue to be slow.

In a recent report by Hinderlater de Llamas and Associates, Imperial Beach sales tax revenues were reported to have grown 3.3 percent when compared to this time last year. With gas prices on the rise, fuel stations showed some of the largest growth.

Used auto sales also pushed up auto and transportation revenues. Restaurants and other businesses also showed marginal gains.

Not every sector improved. Food and drugs took a hit but losses were slightly inflated. Business closures led to declines in general consumer good consumption.

While sales tax revenue accounts for less than $1 million of the city's annual $18 million budget, City Manager Gary Brown said every little bit counts.

“A couple hundred thousand dollars to our city is a big thing,” he said.

Growth is positive, said Brown, but the city remains wary.

“Sometimes recessions are partially psychologically caused,” he said.

“I hate to be too pessimistic. We’re doing what we can, certainly, but we’re very cautious.”

Although sales tax figures track closely with consumer confidence, experts say that does not necessarily signal a robust recovery.

“What we’re saying to people, our forecast, is that we don’t expect negative growth but we’re predicting very modest growth,” said Erik Bruvold, president of the National University System Institute for Policy Research.

This is the fifth consecutive quarter of recovery for California with local sales and use tax revenues showing more than a 9 percent increase.

“Things have stabilized from the recession when we were seeing declines of up to 10 percent in sales tax,” he said.

But numbers are still almost 15 percent lower than in 2006-07.

“It’s going to continue to feel like a pretty tough economy,” said Bruvold.

Katy Fallon, owner of Katy's Cafe, is optimistic.

“I feel pretty confident about [the economy,]” Fallon said. “I think things are only going to get better. We’ve already gone down—it’s time to come back up.”

Fallon has operated her cafe for five years. When the recession arrived, she aimed to keep prices affordable even though her costs increased.

“A lower per person average kept me happening,” she said. “That’s what my whole target was. I set out to do volume, not gouge the customer.”

With development continuing, Fallon hopes that new businesses like the incoming hotel on Seacoast Drive will contribute to local business ventures.

“I think things are getting more stable,” she said. “I think the improvement in Imperial Beach is really obvious.”