Beauty shops, movie theaters and bars and restaurants shone like Olympic superstars during the first three months of 2002.
But it wasn't enough to give Utah the revenue boost state officials and business leaders had hoped for, according to a report by the Utah State Tax Commission.
In fact, despite a nearly flawless Olympic gala, taxable sales in the state for the first quarter of 2002 languished at $7.8 billion, a mere 0.6 percent gain over last year's first quarter.
"The first quarter 0.6 percent gain was well below our forecast for the Winter Olympics of nearly 4 percent growth," the report said.
And after adjusting for consumer inflation of 0.7 percent, real taxable sales and purchases actually slipped into negative territory, down 0.1 percent. Slumps in the state's mining, construction, manufacturing and transportation industries pulled the overall numbers down, according to the commission report.
In Salt Lake County, where the heart of February's celebrations were held, a 1.5 percent decrease in overall sales occurred.
But don't blame stationery shops and shoeshine parlors or video rentals and camera store sales for fewer tax dollars pouring into state coffers. Those businesses all showed double- and triple-digit increases in taxable gross sales in this year's first quarter when compared to the same period of 2001.
In addition, hotel and lodging establishments showed a 30.5 percent increase. So did private motor vehicle sales, up 10 percent.
"We would have been a lot worse off without the Olympics," said Leslee Katayama, a senior economist for the Utah State Tax Commission.
James Wood, associate director for the University of Utah's Bureau of Economic and Business Research, said this year's slump in taxable sales is not surprising.
"A lot of it has to do with business investment," Wood said, noting that it was down 20 percent. "That's all related to some excess capacity of some sectors, but the consumer still seems to be spending. It's the softest economy we've had in 12 or 13 years. What's surprising is retail is hanging in there and business is weak."
Except for the Persian Gulf War in early 1991, the state had not witnessed flat real taxable sales since 1988.
In addition, Olympic hype scared many people away from the mountains, with ski resorts reporting an 8.5 percent drop in taxable sales over the previous winter.
However, strong increases in department store sales and other shopping centers more than offset the declines in furniture sales and food at grocery stores, the report said.
Shortly after the Games ended, the Downtown Alliance conducted an informal survey of 199 businesses, finding that 54 percent reported some level of increased sales during the Games. Of those, 14 percent had at least a 100 percent increase in sales.
Of 30 sectors tracked by the commission, only 15 reported growth, including retail trade, the largest sector, which showed an increase of 5.2 percent. Eleven of 27 Wasatch Front cities showed fewer direct sales over a year ago.
"It would have been significantly worse had we not hosted the Olympics," said Natalie Gochnour, spokeswoman for Gov. Mike Leavitt. "There's just no question that these are difficult economic times."
E-mail: danderton@desnews.com