June 2018 Grand Forks Sales Tax Forecast

The big month is finally here! We now have a month with sales tax numbers reflecting the increased sales tax rate for the Grand Forks. We are all so happy that we could… Alright, enough of that. The results are somewhat to be expected. From the May 2018 total June was down over $200,000. Costs go up with the sales tax increase and people and businesses adjust if they are able. The more problematic part really is that June 2018 is down almost 1% fro June 2017, more than $120,000. These are not outcomes we particularly like even though they are somewhat predictable.

The fact is my best forecast is still for a flat trajectory of the sales tax over the next couple of years. That picture should came into sharper resolve over the next few months as we compare the sales tax collection numbers with the higher tax rate to prior years. If people and businesses adjust spending patterns as a result or the tax, or the closure of more stores, the outlook is decidedly negative. 

The comparison of the last two months of forecasts gives a little bit of hope because it points to a higher forecast this month than last month. Here is the issue really: last June was something of an outlier month so what is really the pattern we expect to see going forward? In addition, it is not like the sales tax just suddenly changed in June. There is every reason to believe significant adjustments happened in anticipation of the change and the June number reflects something else, like bad weather or more people out of town for vacation.

The bigger concern remains that we do not have a clearly positive direction for sales tax collections and the combination of circumstances surrounding the economy in Grand Forks right now is not likely to push strongly in that direction, if it provides any direction at all. 

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