The State of the Economy

It is no secret that the ebb and flow of the local economy significantly impacts city and town budgets. However, predicting this potential impact can be a rather difficult task for city officials.

Cities and towns receive the majority of their tax revenue from sales tax and property tax. Sales tax can be somewhat volatile depending on the state of the economy and type of industry within the city. In addition residential construction can have a negative or positive impact on cities budgets, depending of the rate of construction. For example, many of the good used to build and furnish a new home are subject to sales tax--when homes are not being built that potential revenue decreases.

Doug Macdonald, former Chief Economist for the Utah Tax Commission, has teamed up with the League to provide economic forecasts and outlooks to help in the year round budget process. Please check back to this page often for forecasting updates. In the meantime email Neil Abercrombie with any questions: nabercrombie@ulct.org

Important economic indicators

Every three or four month the League reviews the current state of economic indicators that are salient to Utah's cities.

These indicators are:

  • Utah Wage and Salary
  • Utah employment
  • Utah average wage
  • Utah unemployment claims
  • Construction employment claims
  • Residential construction values
  • Nonresidential construction values
  • Long/short term yield spread
  • Misery index
  • U.S. CPI (inflation)
  • Utah unemployment rate
  • Local 1% sales tax

Each of these indicators are reviewed by a scale of green to red — green illustrating this economic indicator is still strong, red illustrating that is not growing or decreasing.

How to forecast sales tax for your city and town?

Data needed for sales tax forecasting?