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O.C. Taxable Sales Drop in 2nd Quarter : Recession: Figures show how badly the retail industry has been hit. The 6.3% decline is the worst in at least two decades.

TIMES STAFF WRITER

Orange County’s taxable sales dropped 6.3% in the second quarter, the worst quarterly drop in at least two decades, according to state figures released Monday.

The sales decline in the three-month period ended June 30, compared to the same period in 1990, is perhaps the strongest proof yet of how the recession has ravaged the once robust retail industry in the county. It is the fourth consecutive quarter in which sales have fallen and follows a 6.1% drop in the first three months of the year.

For the second quarter, Orange County’s taxable sales were $6.6 billion, compared to $7 billion for the same period last year. The county was not alone in experiencing a decline. Sales were off 7.5% in Los Angeles County, 4.8% in San Diego County and 8% in Riverside County, though sales increased 3% in fast-growing San Bernardino County.

“Obviously, bad news,” said Bruce DeVine, chief economist for the Southern California Assn. of Governments, based in Los Angeles. “Given everything else that is going on in the economy, the fact that these numbers were worse than the previous quarter is not surprising.”

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Not all the news was bad. Three small cities--Yorba Linda, Cypress and Seal Beach--saw healthy taxable sales increases. Even Santa Ana and Brea were up slightly. But the rest of the county was by and large not as fortunate.

Just about everything that consumers buy is subject to state taxes. There are some exceptions, like food bought from supermarkets. Taxable sales figures, released by the State Board of Equalization, include both sales by stores and non-retailers, such as manufacturers that sell part of their production directly to the public.

The taxable sales statistics are important because they provide a barometer of how retail stores are faring. The figures are watched closely by city and county governments for indications of how much tax revenue to expect.

Orange County’s building boom and its healthy employment base kept taxable sales growing even during recessions in the early 1980s and mid-1970s. With the housing industry and defense-related businesses in a tailspin, however, the county no longer has such insulation from economic downturns.

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“It may be regarded as an indicator of the county’s economic maturity,” DeVine said.

The second-quarter results were even worse in Orange County than was predicted, said Esmael Adibi, director of the Center for Economic Research at Chapman University in Orange.

“We were expecting the number was going to come out real bad,” he said. “This is coming out much worse.”

He said the center had predicted a 1% sales decline for the April-June quarter. But he added that the economic model does not allow for changes in tax rates. The county’s sales tax climbed to 7.75% in July, up from 6.5%.

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The county “has never been recession-proof,” he said, and with the downturn in construction and defense, “we have gotten hurt much worse than the rest of the country.”

A rebound in retail sales is not likely to come until the middle of 1992, Adibi said.

Taxable Sales Take A Tumble Taxable sales showed a year-to-year drop by 6.3% in the second quarter of 1991, the worst performance for the period in at least two decades. Twenty-one of 26 cities reported lower taxable sales for the quarter than for the year-earlier quarter. There were no 1990 figures for Laguna Niguel, La Palma or Villa Park.

Winners and Losers Only five cities in the county showed an increase in taxable sales for the second quarter from 1990 to 1991

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1991 1990 2nd 2nd % City Quarter Quarter Change Anaheim 697,625 791,239 -11.8 Brea 173,858 171,776 +1.2 Buena Park 189,529 225,225 -15.9 Costa Mesa 507,912 535,081 -5.1 Cypress 81,970 75,328 +8.8 Dana Point 45,989 51,005 -9.8 Fountain Valley 147,934 154,798 -4.4 Fullerton 270,584 290,686 -6.9 Garden Grove 263,232 293,774 -10.4 Huntington Beach 360,770 374,674 -3.7 Irvine 468,829 498,592 -6.0 Laguna Beach 48,354 50,223 -3.7 Laguna Niguel 71,504 NA NA La Habra 90,799 96,296 -5.7 La Palma 25,056 NA NA Los Alamitos 42,850 48,144 -11.0 Mission Viejo 123,252 125,087 -1.5 Newport Beach 236,755 263,009 -10.0 Orange 416,042 446,218 -6.8 Placentia 62,792 63,108 -0.5 San Clemente 56,841 61,517 -7.6 San Juan Capistrano 65,510 71,895 -8.9 Santa Ana 635,238 617,929 +2.8 Seal Beach 29,640 27,667 +7.1 Stanton 58,234 63,001 -7.6 Tustin 194,809 203,645 -4.3 Villa Park 3,368 NA NA Westminster 183,671 197,159 -6.8 Yorba Linda 49,649 42,432 +17.0

* Qualifier, if needed Source: State Board of Equalization

Countywide Sales Year-to-year percentage change: ’80: 9.2% ’81: 12.9% ’82: -2.0% ’83: 10.5% ’84: 21.7% ’85: 11.2% ’86: 2.3% ’87: 13.6% ’88: 5.2% ’89: 8.6% ’90: 2.8% ’91: -6.3%


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