More Buying Local? Taxable Sales Rise in Belle Fourche, Spearfish, Lead, Aberdeen, Eureka…

Last updated on 2020-05-18

A commenter shares an article from the Black Hills Pioneer noting that Belle Fourche is enjoying a coronavirus business boom:

April sales tax numbers jumped in Belle Fourche, up 78.3% over 2019.

“I didn’t in a million years expect to see numbers like that,” Breanna Schaefer, the city’s finance officer told the Pioneer Wednesday.

Even amid pandemic conditions, the city’s April sales tax revenue brought in $268,320.77. That represents an increase of $117,837.43 over April 2019’s $150,483.34 worth of revenue [Lacey Peterson, “Belle Fourche Sales Tax Revenue Up 78.3%,” Black Hills Pioneer, 2020.05.15].

Maybe Schaefer has received an updated report with different figures, but the Department of Revenue’s report for April 2020 receipts shows municipal sales tax returns filed from Belle Fourche this April totaling $251,333.59 in tax due, a 6.69% increase over 2019’s $235,577.51. State taxable sales in April 2020 rose 7.9% in Belle Fourche and 6.8% across Butte County over April 2019.

Schaefer speculates (because Belle Fourche is governed by wild guesses, not actual data, right?)

“So, I have no way of knowing, ‘Were people panic-buying at the grocery stores?’” she said. “I personally feel like that’s what happened, but I don’t have any evidence to support that. So, I think people … they loaded down their freezers, they did whatever they needed to because we didn’t know how long this was going to last.”

“A lot of people really pulled to support the local businesses,” she said. “So, I think people were more cognizant to grab a burger from Graps (Burgers & Brews), or something of that nature, as opposed to going to Applebees in Spearfish.”’

An increase in online shopping due to boredom is another theory Schaefer has related to the increase [Peterson, 2020.05.15].

(Note: since they aren’t based on empirical tests, Schaefer’s guesses aren’t “theories” but hypotheses. We have enough trouble with numbskulls dismissing real science as “just a theory,” so let’s not muddle the language further.)

There could be some logic to the claim that pandemic concerns have led South Dakotans to make fewer trips out of town for shopping and recreation and thus buy more groceries closer to home. But the state taxable sales report shows that Spearfish reported a 5.6% increase in taxable sales in April, so if Belle Fourchiens made fewer grocery runs to Spearfish, Spearfishers perhaps made fewer grocery runs to Rapid City.

Lawrence County as a whole saw state taxable sales drop 2.8% from this April to last, largely because of a 35.0% drop in Deadwood (casinos just reopened last weekend) and a 25.3% drop in Whitewood (less I-90 traffic pulling in for gas?) But Lead saw a 9.8% increase, which we might hypothesize is similar to the Belle Fourche effect: instead of trucking down hill to the Spearfish Walmart, Leadites may be settling for convenience and decreased cootie risk of their own Lynn’s Dakotamart.

But the buy-local hypothesis does not find support in the Rapid City returns, where April shows only a 0.1% decline in state taxable sales compared to April 2019. SO if whole hoards of out-of-towners quit going to Rapid City for provisions, Rapid City’s locals (Rapid Citians? Rapid’s Hittites? Rapid Sitters?) mostly made up for it with their own toilet paper and bologna purchases.

Lake County in tranquil East River provides evidence that a coronavirus buy-local effect isn’t counterbalancing a pullback in spending. When you want to see Madison neighbors on the weekend, your best bet is to go grocery shopping in Sioux Falls. If coronavirus were keeping grocery shoppers home, I’d expect to see a particularly significant uptick in purchases at Sunshine Madison. But no: Madison’s state taxable sales dropped 11.9% in April. Ramona, Winfred and Wentworth saw April mini-booms, but Nunda, Rutland, and Chester mini-shrank, and Lake County as a whole saw state taxable sales slide 7.4%. Either Lake County’s regular commuter shoppers kept on traveling for selection and price, or they just bought less stuff.

But Minnehaha County, the beneficiary of much of Lake County’s and other neighbors’ spending, did see an overall drop in state taxable sales of 4.5% in April. Sioux Falls was down 5.0%, while Hartford gained 15.8%, Garretson rose 7.1%, and Dell Rapids rose 4.0%, so there could be some shift of commuter spending.

Interestingly, the Lincoln County portion of Sioux Falls saw state taxable sales rise 8.9%. But the $46.9 million in state taxable sales generated in the urban beard south of 57th Street is only 4% of the $1.16 billion in April taxable sales reported in Sioux Falls. Elsewhere in Lincoln County, Harrisburg saw state taxable sales rise 9.5% and Tea rose 4.7% while Lennox dropped 6.6%. Beresford dropped 59.7%, suggesting, like Whitewood, that towns dependent on Interstate traffic are really taking a hit.

But pause that Interstate hypothesis, too: Summit saw state taxable sales skyrocket 111.2% over last year, so the expanded Coffee Cup appears to be chugging along fine. Kimball rose 20.0% and Chamberlain gained 2.3%… but across the river, Oacoma dropped 14.1% and Presho fell 27.3%. Murdo was up 4.2% and Kadoka was up 7.8%, but Wall was down 4.1%.

Here in Aberdeen, far from the Interstate, we’re buying tons of stuff. State taxable sales in the Hub City rose 15.5% in April. Almost every other town in Brown County was up, too: Groton 1.9%, Bath 5.4%… the only Brown County map-dot to see a drop was Hecla, at –20.4%. As a whole, Brown County’s state taxable sales were up 15.8%. To the west, Edmunds County gained 26.4%. McPherson County lost 7.4%, even though its star metropolis of Eureka rose 9.2% (Charlie Hoffman must have come to town and bought a truckload of paint and plywood for campaign signs.)

Whatever economic factors may be at work at the local level, the big number is the statewide figure: in April 2020, state taxable sales rose 5.97% over April 2019 across South Dakota. Eating and drinking places took a 21.8% hit, and car dealers and service stations saw 4.1% less taxable business, but electric, gas, and sanitary services gained 32.3%, building materials and garden supplies rose 20.4%, food stores climbed 17.6%, and business services did 12.1% more business…

…all of which might make one wonder just why Governor Noem is so intent on diverting $1.25 billion in coronavirus relief to her state coffers instead of spending that money the way Congress intended, to provide immediate coronavirus relief.