When officials planned the current budget for the city of Albuquerque, they expected a gradually improved economy to bode well for the city’s largest source of income.

They assumed a 5% year-over-year growth in the gross revenue tax, or GRT – an assessed tax on the sale of almost all goods and services, from lipstick to roof repairs.

But the reality – at least so far – has turned out to be much better.

The city received $ 93.5 million in GRT in the first two months of fiscal 2022, about 18.4% more than the same period a year ago. This is even better than pre-pandemic levels, reaching almost 11% more than the same duration in 2019.

But year-over-year growth is actually closer to 22% for the July / August period, according to an analysis of the city of the GRT coin least affected by changes in state tax policy.

The TSO is the cornerstone of the city’s budget, supplying around two-thirds of basic operational expenditure. It’s also a key indicator of the economy, said Sanjay Bhakta, chief financial officer of Albuquerque.

“I think this is the most reliable indicator of growth,” said Bhakta, who calls GRT “a direct reflection of spending and consumer confidence.”

Although GRT comes from a variety of industries, including healthcare and educational services, the retail sector is the city’s biggest contributor overall.

And the latest figures show it is booming.

Bhakta noted that total retail taxable gross receipts in July were higher than even in December 2019, a very spending holiday month before the pandemic hit.

The retail sector saw 27% year-over-year growth in August, according to an analysis by city economist Christine Boerner.

A change in policy probably contributes to this. Since July 1, the city collects for the first time all of its taxes on all sales on the Internet.

In the past, it had only received a lump sum from state government online sales tax collections – $ 12 million in the last fiscal year – regardless of the actual amount of online purchases. of city residents.

The city has estimated its true Internet sales tax revenues to be closer to $ 18 million, but there is no way yet of whether it is able to meet, or even exceed, this. forecast, because state tax reporting does not isolate internet sales.

“We don’t have enough data… (to) give us an educated estimate of how much is attributed to the Internet, but there is definitely that factor,” Bhakta said. “We cannot ignore this.”

But there is also improvement in other vital sectors, including construction, which grew 25.3% year-on-year in August, and accommodation and food services, which rose 35.6%. , according to Boerner’s GRT report.

The tenant tax – a separate revenue stream linked to hotel nights – is also seeing huge gains. The combined tourist tax in July and August is up 128% compared to the same months in 2020 and even 34% compared to the same period in 2019.

With numbers tending to be high two months after the start of the fiscal year, Boerner said she would eventually review and update her TSO growth forecast, but did not plan to maintain that level of improvement because there are usually fluctuations in any given year.

“I don’t expect growth to stay at 21%,” said Boerner

The months counted so far – July and August – represent a period during which the federal government has offered additional unemployment benefits of $ 300 per week. This boost expired in September.

But available reports do not yet capture the Balloon Fiesta either, which could have a positive impact when the October numbers arrive in mid-December.

Even as the TSO’s growth declines from current levels – which Bhakta says is likely – he said the signs are broadly positive, citing the short-term increase in the rise in retail sales and the effect long-term positive from the increase in construction activity.

“Comparing it to the previous year, we are obviously doing better, and that is really expected. What kind of (shocked) were we doing much better than calendar year 2019, which we didn’t expect. So that’s good, ”he said. “Now how much of that is attributed to internet sales? How much is allocated to the rejected request? … We’ll have to kind of keep an eye on this.