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State sales tax collections up 2.6%


6/16/2012 9:55:00 AM

 By Howard Fischer

 PHOENIX -- Job creation may still be slow in Arizona. But that isn't keeping Arizonans from opening up their wallets a little bit more.

Figures from the state Department of Revenue put retail sales reported in May at $4.11 billion. That is up 2.6 percent from the same time a year earlier.

That includes an 11 percent increase in motor vehicle sales and a more than 5 percent increase in what Arizonans are spending on clothing and accessories.

The numbers actually reflect what consumers were doing in April, as retailers file their reports -- and pay their taxes -- the following month.

"These numbers are encouraging and show that spending continues to grow at a respectable rate,' said Marshall Vest, an economist with the Eller School of Management at the University of Arizona.

But Vest said the picture was not equally bright across the board. He said that big gain in the sales of cars and trucks were offset by declines in what people were spending on both furniture and building materials.

Lee McPheters, economics professor at the W.P. Carey School of Business at Arizona State University, said that 2.6 percent year-over-year increase in retail sales is good -- considering the rest of the economy.

"Job creation is running about half speed,' he said of Arizona, with the state adding only about 45,000 new workers this year instead of the 80,000 to 90,000 in a normal year.

"So it is not surprise that retail sales for the current fiscal year will be several points below what would usually be expected three years into economic recovery,' McPheters said.

Anyway, he said, it could be worse.

"If it is any comfort, job growth in Arizona, slow as it is, is better than most other states,' McPheters said, with the state currently running sixth in the nation.

The report also shows some increase in discretionary spending.

Sales at restaurants and bars are up 6.3 percent over the same period a year earlier. And receipts for hotels and motels, a sign of tourism, are 4.1 percent higher.

"All in all, not bad,' Vest said. "But we need to watch closely how the retail, restaurant and bars, and contracting categories fare going forward.'


 

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