As reported in the San Francisco Business Times, California's Cities and Counties are losing millions of dollars because of falling sales tax revenues. As of October, consumers were stubbornly refusing to open their purses and wallets and flash the plastic at stores statewide.
The chart below tracks the annual change in the 1% retail sales distributed to the largest cities in Marin, using data from the California Board of Equalization. The distributions take place 1-2 months after the sales are made; so it looks like the September bump was largely caused by the one-off impact of August spending on "Cash for Clunkers". Distributions were up in the main car dealer locations: +40% in Novato and +14% in Corte Madera.
For Marin County in total, sales tax distributions in September were at the same level as in September 2008. That's an improvement over the year to August, where sales tax revenue averaged $2.2 million per month in 2009, compared with $2.7 million for the same period in 2008.
Come October however, and the sales tax distributions were back on the downward track, averaging -14% below October 2008 for the county as a whole. This is somewhat better than the May-August period this year, when the year-on-year sales decline ranged between -20% to -30%. It could be that retail conditions are improving, or it could be that some of the Clunkers payments carried over into the October numbers. The November figures will be out soon, at which time we will find out more. National indicators suggest an upward trend.