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City sales tax exceeds county, state averages
small business saturday 2
Turlock's 2014 third quarter sales tax report indicates that people are spending money in the city. - photo by Journal file photo

The City of Turlock is outperforming both Stanislaus County and the State of California in sales tax revenue and while this is indicative of a strengthening local economy, it doesn’t necessarily translate into more money for the City.

“We only end up with about one percent of the sales tax. Everything else goes to the State,” said Assistant to the City Manager for Economic Development and Housing Maryn Pitt. “I think the important thing to note, because as much as this is a great picture, what we get to keep is small.”

Pitt delivered an update on the City’s 2014 third quarter sales tax report at Tuesday’s City Council meeting and noted that there is growth in many industries in Turlock which is an indicator that people are spending money.

 “Other places just haven’t made the comeback from the recession as quickly as we have,” said Pitt, likening Turlock’s numbers to that of some Bay Area communities.

Turlock’s restaurant sector lead the way with 12 percent growth compared to the previous quarter while office equipment purchases saw a nearly seven percent decrease. While consumer needs are overall being met, there are certain sectors where “leakage” is taking place, meaning that consumers are purchasing items out of town. This is true for new and used auto sales, which rang in at 63 percent indicating a 37 percent leakage. Other areas of leakage included furniture sales, food markets and florists or nurseries to name a few.

On the contrary, areas of economic “capture” include industries where sales tax revenue is at 100 percent or more. Liquor stores have 235 percent capture, department stores have 144 percent capture, and restaurants reached 108 percent. Food processing equipment led the way with 253 percent capture meaning that companies buying large industrial equipment are not just performing one-time purchases, but rather this is a developing trend unique to our market said Pitt.

 “This data is something that allows us to tell our story in a more meaningful way,” said Pitt of the report.

 “The story is that we are 11 percent of the county’s population, but we generate almost 18 percent of total county sales tax. Meaning, we generate a lot more than what is proportional to our population,” she added.

Pitt anticipates that the 2014 fourth quarter sales tax numbers will be even higher due to the opening of the Monte Vista Crossings southern expansion and seasonal shopping.