July was another lackluster month for Tri-Cities retail sales tax collection.
Kingsport-Bristol collections have lagged the four-county area’s 2018 market share benchmark every month this year. The three-county Johnson City metro area came off a good second quarter with collections that were not enough to keep pace with the 2018 benchmark. Both local metro areas’ market share was in the shadows of Knoxville’s and Morristown’s performance.
East Tennessee’s July performance was better than the state’s year-over-year gain due to consistently strong collections in the Knoxville Metropolitan Statistical Area (MSA). Knoxville was the only East Tennessee metro area with a positive year-over-year seasonally adjusted picture, according to the monthly report from Middle Tennessee State University’s Department of Economics and Finance.
July’s area year-over-year collections were:
Knoxville, up 1.5%.
Johnson City, down 0.1%.
Morristown, down 4.1%.
Kingsport-Bristol, down 4.1%.
Statewide, collections were 3% better than July last year.
All of the state’s metro areas were down when July’s collections are compared to June. Here’s what the looked like across East Tennessee;
Knoxville, down 3.7%.
Morristown, down 6.1%.
Johnson City, down 6.3%.
Kingsport-Bristol, down 6.7%.
Statewide month-over-month collections were down 0.7%.
Kingsport-Bristol’s issue is its economy has not been able to sustain 2018’s collections pace, which was some of the strongest in the state. When year-to-date collections this year are compared to 2017, they’re up 3.3% but 1.5% below they were in the first seven months of 2018. Kingsport-Bristol year-over-year performance has been negative four months this year, so far.
The Johnson City metro area began the third quarter with a market share almost equal to its 2018 annual average. That was just enough to get year-to-date collections 0.1% above the benchmark for East Tennessee. Johnson City’s economy has produced collections levels that kept its year-over-year performance positive five months so far this year.
July’s sales tax collections stood in contrast with ramped up consumer spending nationwide giving fundamental strength of the U.S. economy.
Personal consumption was up 0.6% despite a slowing of household income growth.
Odds for continued strong consumer spending are mixed. Reports show small businesses are confident, but consumer sentiment posted its largest drop since 2012 in August. Economists attribute the decline to concerns over tariffs. At the same time, the long-term outlook continues to be uncertain on concerns about global growth.