BREA, Calif.–(BUSINESS WIRE)–#localgov–The Golden State reported a slight decrease in sales tax receipts in the third quarter of 2023, showing an overall decline of 1.6% compared to the same period in 2022.
n“An 8% decline in receipts from service stations and petroleum providers contributed the most to the drop as consumers benefitted from lower prices at the pump. This also dampened receipts from sellers of general consumer goods as those retailers selling fuel experienced a similar drop. We also saw consumers pull back on large purchases,” stated Andy Nickerson, President/CEO of HdL Companies, the leading provider of revenue enhancement, technology and consulting services for local governments.
nBuilding and construction projects continued slowing as higher interest rates constrained commercial development, public infrastructure projects and new housing starts. Meanwhile, despite an increase in new car registrations and the effect of rental car agencies restocking their fleets, the automobile and transportation sector declined 2.6%. Like other industry groups, elevated financing costs are expected to create headwinds for auto sales.
n“Spending at local restaurants was a bright spot in the data showing an increase of 2.6%,” noted Nickerson. “As tourism, holiday and business travel are all expected to recover in 2024, the industry is bracing for implementation of AB 1228, a new California law setting minimum wages for fast food restaurants.”
nHdL Companies expect sales tax receipts to decrease modestly in the final quarter of 2023 before making a recovery in 2024. “Lingering consumer confidence may have also received welcome news as the Federal Reserve considers softening rates by mid-2024,” Nickerson concluded.
nView a complete table of sector and regional data. Each quarter, HdL Companies reports on California’s sales tax receipts and their impacts on local jurisdictions.
nAbout HdL Companies
nHdL Companies is dedicated to supporting local governments across the U.S. with revenue enhancement, technology and consulting services that enable cities, counties and special districts to better serve their constituents. Founded in 1983, HdL Companies’ comprehensive approach to revenue management is trusted by over 700 local governments. The company has successfully recovered over $3 billion in revenue for client agencies. For more information, visit hdlcompanies.com.
nJennifer Pierce, HdL Companies, 714.879.5000