The city of Seattle had the largest drop in sales tax revenue last year among Washington municipalities, according to a new report from the Office of the Washington State Auditor.
Seattle’s sales tax collection was down more than $46 million from the year before, from $348.5 million to $302 million; a 13.3% decline.
Overall sales tax collection in Washington was down 4.5% last year, for a $76.7 million decline. Seattle made up more than half of that decline.
The auditor’s office reported that “167 of 272 cities (that’s over 60%) saw an increase in their sales tax collections over pre-pandemic 2019.”
“We think each city has its own story that explains the increase or decrease,” the report said. “We shouldn’t assume any one factor is responsible for changes.”
Seattle Mayor Jenny Durkan’s office did not provide a comment on the city’s sales tax decline despite multiple requests.
Like most of Washington, Seattle had lockdowns last year. It also had ongoing protests so pronounced that many protesters took over an area on Capitol Hill and called it an “autonomous zone,” which kept out law enforcement and most commerce.
James Sido, director of issues management at the Downtown Seattle Association, pointed out additional problems that led to lower collections.
“The restrictions on in-person events and the absence of office workers were huge drivers of the dip in sales tax for Seattle,” Sido said.
While consumer spending in the state wasn’t all bad news, it was mostly bad news for Seattle.
“While consumer spending rose for some sectors in 2020, some of the ones that were hit hardest are regionally-concentrated in Seattle, and you could say downtown Seattle specifically for some,” Sido said. “These were restaurants, hotels, health care and recreation (arts, culture, tourism, sports, etc.). Each of those typically generates quite a lot of local sales tax – and have additional multiplier effects – and most were either closed or extremely limited for all of 2020.”
Sido predicted improved sales tax collections for this year.
“As we saw a rise in visitors and foot traffic in 2021, particularly in the summer months in downtown, those numbers should be stronger,” he said.
Washington Examiner Videos
Original Author: Jeremy Lott, The Center Square