Sales tax receipts down 11%

by BOB BARTON

There’s not much good news in State Comptroller Susan Combs’s report of sales tax collections for the new year. Collections for January in the state’s 1,138 cities dropped $35 million below those of a year ago. That’s more than 11 percent below city sales tax collections received last January.

The serious slump is a continuation of a trend that goes back to early last year and doesn’t bode well for the financing of state and local government which is heavily reliant on this tax for operational expenses.

Hays County’s ten cities didn’t fall quite so badly, and Kyle actually showed a healthy increase in receipts. However Buda, San Marcos and Dripping Springs registered sharp drops in income and the bottom dropped out in Wimberley, where sales tax decreased by a whopping 40 percent.

Kyle’s sales tax share for the month hit slightly more than $198,000 – good for a 21 percent improvement over last January. However, the jump is leavened considerably by the fact that at least three big box stores – Lowe’s, Target and Kohl’s – were not even open a year ago.

In Buda the drop-off registered a little more than nine percent. However, they still banked considerably more than Kyle, which has about three times more population. Their net for the month was almost $259,000.

San Marcos registered a 7.6 percent drop in receipts, with a little more than $1.4 million in sales tax income. That was about $120,000 below last January’s total.

The county seat relies heavily on the big outlet mall operation south of the city, which has been adversely affected by a decrease in trade from Mexico as well as the statewide downturn in upscale retail activity.

Wimberley’s big income drop – down from a little more than $60,000 last January to less than $37,000 – was a sizable blow. Dripping Springs’ drop was much smaller, less than five percent, and resulted in receipts of a little more than $58,000.

The smaller city receipts included: Woodcreek, $2,799; Uhland, $2,787; Niederwald, $1,746; Hays, $731; and Mountain City, $411.

The Hays County government itself collects a half-cent on sales taxes, compared to a penny and a half for most city governments, and its share of sales taxes amounted to almost $767,000. That too was a drop-off of 4.8 percent from last January’s $805,000.

Overall 65 percent of the state’s cities, ranging from gigantic Houston to quite a number of towns of less than 1,000 residents, registered sales tax drops.

The state’s take of 6.25 cents of the total sales tax revenue produces 57 percent of the overall funds raised to finance Texas governmental operations, including federal funds.

As a result Senator Kay Bailey Hutchison has become increasingly critical of the failure of Governor Perry for not beginning to work on immediate cuts in state spending. She is predicting a $10 million shortfall in current budgetary requirements.

A Perry spokesman is still claiming that the state’s budget is still balanced. However, according to the Dallas Morning News, both Lieutenant Governor David Dewhurst and House Speaker Joe Strauss are reported to be working on a draft letter asking for spending cut alternatives.