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No Big Increase in Tax Revenue During Games
A new report shows the 2002 Olympic Games did NOT generate a big increase in state tax revenues.
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(May. 17, 2002)------Friday's Deseret News reports that, in fact--
tax revenue collections for February were essentially flat--
barely higher than for the same period last year.
News Specialist John Daley reports.
This latest information confirms what many folks have been hearing anecdotally. Some businesses and individuals profited richly during the Olympics, some did not.
But overall, the short-term impact on the state's bottomline barely registered.
As with all things Olympic,the dream is often in sharp contrast to the reality.
The dream held the Olympics would mean a strong dose of extra tax revenues, if only for a few weeks.
But the latest numbers suggest the Games represent more of a series of trade-offs.
The Deseret News asked the State Tax Commission to compare revenues from the Olympic period--January through March of 2002--with the year before.
Tax revenues in February 2002 went up a tiny .07 percent.
Olympic-related activities--eating, drinking, hotels, department stores--all showed healthy increases.
Wine and liquor sales in February were up 16 percent. Cigarette taxes skyrocketed by 50 percent.
But motor fuel taxes were down.
So was personal income and purchases by businesses.
Doug McDonald/Chief Economist, Utah Tax Commission: "IN ECONOMICS, WE HAVE A LOT OF TRADEOFFS. A LOT OF PEOPLE MAYBE HAVE LEFT TOWN. A LOT OF PEOPLE TRIED TO SHY AWAY FROM DRIVING DOWNTOWN. APPARENTLY THAT WAS GOING ON A LITTLE BIT. SO YOU HAD THE MIX OF 50 PERCENT OF THE RETAILERS DID WELL AND 50 PERCENT DIDN'T DO WELL."
Several other factors can explain the tax revenues picture. Construction was bustling before the Games, but many of those jobs were done by February.
The September 11th economic lag--continued.
And while the Olympics drew many visitors, they also scared off many normally reliable out-of-state skiers.
And many Utahns changed their routines significantly.
Roger Tew/Former Utah Tax Commissioner: "ANYONE WHO THOUGHT WE WERE GOING TO SEE A BIG SPIKE IN REVENUES BECAUSE ALL OF THIS MONEY WAS GETTING SPENT DURING THOSE FOUR WEEKS, DIDN'T LOOK AT IT LOGICALLY. MONEY WAS BEING SPENT BY CERTAIN PEOPLE IN CERTAIN INDUSTRIES. THE REST OF US WERE HOME WATCHING THE GAMES."
State leaders say the longterm economic impact of the Games will be felt over many years.
And many economists say it'll ultimately be difficult to measure exactly what impact the Games had.
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