Auto sales boost tax revenue

Paul Clinton

Strong auto sales bolstered the city’s sales tax revenue for the

third quarter of 2002, bringing it out of the red for only the second

time in nearly two years.

Revenue to the city treasury from the sale of products and

services rose 1.9% during the three-month timeframe. For six of the

past seven quarters, the city’s sales tax revenue dropped when

compared to the same quarter the previous year. The final three

months of 2001 saw the only other increase.

Officials and business leaders cheered the modest increase, saying

it offered more evidence that the area has not taken the brunt of the

regional slowdown.

“It shows an almost 2% increase, which does bode well,” said Ed

Fawcett, the president of the Costa Mesa Chamber of Commerce. “The

auto dealers’ good showing was really quite a salvation for that

quarter.”

The city receives 1% of every dollar spent inside its borders.

Auto sales placed No. 1 in total revenue generated between July

and September, driving $1.25 million to the city. Department stores

were slightly behind, with $1.05 million in revenue.

When compared to the previous quarter in 2001, auto sales

deposited 21.6% more into the city’s coffers. Gasoline service

stations gave 31.9% more to the city, which was attributed to higher

gasoline prices.

Of the top 25 sales tax generators during the quarter, 11 were in

the city’s automobile industry.

Local auto dealers agreed that the strong quarter was indicative

of a strong year overall. Many dealers were offering attractive

financing plans via their partnerships with lenders because the

interest rates have remained low, said Lori Clinton, general manager

at Costa Mesa Infiniti.

“2002 was an excellent year for all manufacturers,” Clinton said.

“The captive lenders definitely had special incentives.”

At the local Infiniti dealership, hook deals weren’t the biggest

factor. Clinton attributed the dealership’s success to “hot selling”

new models like the G35 Sedan and G35 Coupe, which arrived last year,

and the FX45 and FX35 sport utility vehicles that arrived earlier

this month.

The lot sold 97 cars in January, which is considered a “huge

success for us,” Clinton said. Infiniti did offer aggressive factory

incentives to move the older Q45 models.