Pasadena’s Sales Tax Revenue Dropped for 2023 4th Quarter

Pasadena’s sales tax revenue for the fourth quarter of 2023 fell by 0.2% on a cash basis and 1.7% on an adjusted basis compared to the same period in 2022, according to a report released Thursday by Matthew Hawkesworth, Pasadena’s Director of Finance and Acting Assistant City Manager.

The report, accompanied by a detailed summary prepared by HdL Companies for the City, showed the decline in sales tax revenue follows several quarters of flat year-over-year growth and reflects the impact of economic challenges on consumer spending.

The report showed that only restaurants and hotels showed growth among local businesses, particularly in fine dining and fast-casual dining. Other sectors, such as consumer goods, electronics, and appliances, experienced declines.

HdL Companies revealed that receipts from October through December were 1.1% lower than the fourth quarter of 2022, with actual sales down 1.7% when excluding reporting differences. Factors contributing to the decline include lower car prices, higher loan rates, and reduced spending on non-essential items.

Statewide, California’s sales tax receipts for the fourth quarter were 2.5% lower than the same quarter in the previous year, after adjusting for accounting anomalies. The Southern California region saw a 2.0% drop in taxable sales.

2023 ended with a 2.3% decline in sales tax revenue compared to 2022, as high inflation and interest rates led to increased costs and reduced consumer spending. This trend may continue in 2024, delaying a return to normal historical growth.