Cherry Blossom Season and The District’s Sales Tax

Peak blossoms for the cherry trees in Washington DC were expected earlier this year because of unusually warm weather for many days in February and early March. However, starting March 10, there were ten consecutive days of freezing weather with a wintry mix of precipitation on March 14, putting the official date of peak bloom in jeopardy. (The National Park Service defines peak blooms as the day when 70 percent of Yoshino cherry blossoms are open).

We wondered if the change in weather would damage the cherry blossoms, and consequently if this would have an impact on sales tax collections. Since it’s too early to tell the impact for 2017, we looked at data on cherry blossom peak dates over recent years, to see if there is a visible pattern on the corresponding sales tax collections.

Because the Cherry Blossom Festival spans both March and April, we looked at data for those months individually and combined for fiscal years between 2005 and 2016. We compared past sales tax collections with the historical peak bloom dates. We also analyzed past sales tax collection data to see if the strength of March and April activity ties to an overall better sales tax performance for the fiscal year.sharain1

As figure 1 shows, over the period FY 2005 to FY 2016, the month of the peak blossoms (March or April) was also the month of higher sales tax activity in ten out of twelve years. In 2008 and 2009 the peak month differed from the month of higher sales activity.

In fiscal years with strong collections in springtime (March and April), the total sales tax collections for the entire year were also strong.  In the years 2006 and 2009, where sales tax collections during the spring were not as strong as the previous year, total collections for the entire fiscal year also were not as strong as the previous fiscal year.

As figure 2 shows, the contribution of the cherry blossom season to the District’s sum of sales tax is clear, sales tax collections from these two months, for the period FY 2005 to FY 2016, average about 17.7 percent of total sales tax collections during the year.

sharain2

What exactly is this data?

Our data on sales tax is from the Office of Revenue Analysis monthly cash collections reports. Information on Peak Bloom dates were obtained from the National Park Service also available at https://www.nps.gov/subjects/cherryblossom/bloom-watch.htm

Seble Tibebu and Bob Zuraski contributed to this post.

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