MITCHELL, SD (Mitchell Now) — Sioux Falls tax revenues are beginning to strengthen after several soft years, though the city is still tracking behind its budgeted expectations, according to Budget Director Shawn Pritchett.

Pritchett said sales tax receipts are gradually rebounding as year-to-date growth improves. “Right now we have an annual growth rate of 2.6% year to date,” he said. “That is up since what we’ve seen last month. This compares to about a 1.5% growth rate last year.”

While tax collections remain under projections, the city is experiencing significant movement in another key economic indicator: construction activity. Sioux Falls has recorded $1.2 billion in building permits through October, an increase of about $254 million from the same period last year.

City officials say large commercial developments are driving much of the construction growth, helping offset slower tax performance and signaling continued investment in the community.