Tumwater reports shrinking sales tax

The City of Tumwater reported reduced sales tax in the first five months of the year, in part because of consumer spending habits. 

Finance Director Troy Niemeyer reported to the Tumwater City Council at a meeting on Tuesday, June 17, that the collected sales tax from January to May was lower by 4.9% compared with the same period last year. 

The finance director said sales tax receipts in the first quarter were up 2.8% from the same period last year.

But fortunes turned in April, as the city recorded its lowest single-month collection of sales tax in the last three years with a drop to $694,744 in April 2025 from $739,740 in April 2024. 

May sales tax also fell to $782,965 in May 2025 from $846,937 in May 2024. 

While he didn’t conclusively attribute lower tax collection to ongoing trends of reduced consumer spending, he acknowledged it was a factor.  

Before sharing the status of the city’s taxes, Niemeyer discussed the wider state of the economy. Among the topics he mentioned were economic uncertainties caused by the policies of the federal government, a 0.3% contraction of the nation’s gross domestic product in the first quarter of the year, the possibility of recession, and falling consumer confidence. 

Despite the challenges in the national economy, Niemeyer spoke of the city’s fiscal strengths. 

He said although sales tax is now the city's largest revenue source, the city relies on it less compared to other cities, which derive 30% to 50% of their revenues from sales tax. 

Niemeyer also remarked on the stable employment in the city due to the presence of state agencies, acknowledging though the state workforce may shrink, the impact is not that drastic in the city. 

He added the city expects continued growth in the next 20 years, as reflected in its comprehensive plan. 

Niemeyer also spoke about the collection status of other taxes in the city, which shows a more positive outlook. 

The city’s business and occupation tax, which is imposed on the gross income of businesses in the city, was up. From January to May saw a 7.6% increase year-over-year, despite a drop in May to $130,113 rom $162,459 in May 2024. 

Other sources of revenues were too early to detail due to timing factors, but Niemeyer’s presentation also touched on property taxes, building permits, utility tax and fees, and more. 

Another positive note was that the total running expenditure for the year ($19.2 million) is falling below what was originally budgeted by around 5%, providing the city with greater flexibility should revenues continue to decline.