(The Center Square) – The town of La Center had the sixth-largest percentage increase in sales tax revenue last year among Washington municipalities, according to a report from the Office of the Washington State Auditor.
La Center’s sales tax collection was up more than $267,000 from the year before, from $374,224 to $641,793; a 71.5% increase.
“Higher sales tax receipts are a good indication of economic growth,” University of Central Arkansas economist Jeremy Horpedahl said.
There are some important exceptions to that, including the federal government’s large “injection of cash to consumers outside of economic growth,” he cautioned.
Overall sales tax collection in Washington was down 4.5% last year, for a $76.7 million decline. The auditor’s office, however, 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.”
La Center Manager of Administrative Services Maria Swinger-Inskeep credited development for the tax windfall.
“This past year, the La Center School District built a new middle school, which increased the sales tax revenue,” she said. “That, in addition to an increase in residential development and the commercial development downtown, contributed to an increase in revenue.
“We do not anticipate that continued trend for 2022,” she said.
When asked how middle school construction could so substantially increase tax collections, Swinger-Inskeep said the price for construction from 2018 through August had come to $46,028,709.
“We receive sales tax revenue from all of the construction, supplies, new furnishings etc.,” she said.
Many southwestern Washington communities close to Portland, Oregon, have grown significantly as bedroom communities and received sales tax windfalls last year as more people stayed home more because of pandemic lockdowns.
Battle Ground sales tax collection was up more than $368,000. Camas was up more than $757,000.