Weather or not, sales tax revenue up

Although some Southeast Texas communities continue to see declines in their sales tax revenue as a result of Hurricane Rita, the overall state and local sales tax revenues are up significantly, reported Texas Comptroller Carole Keeton Strayhorn.

Gregg and Rusk county communities faired well this reporting period and for the year.

The state collected $1.58 billion in sales tax in November, up 9.4 percent compared to November 2004. December sales tax allocations to local governments rose by $50.8 million, or 15.8 percent, compared to December 2004.

Strayhorn today sent $372.4 million in December sales tax allocations to cities, counties, transit systems and special purpose taxing districts, up 15.8 percent compared to last December.

Texas cities received $252.8 million in sales tax allocations, up 15.8 percent compared to December 2004. Texas counties received December sales tax allocations – mostly representing sales in October – of $21.8 million, up 17.2 percent compared to one year ago. The 103 special purpose taxing districts around the state received $10.6 million in sales tax, up 22.5 percent compared to last December. Ten local transit systems received $87.1 million in December sales tax payments, up 14.6 percent compared to a year ago.

November state sales tax collections and December sales tax allocations to local governments mainly represent sales that occurred in October.

In the December alloction, Gregg County received $854,763, an increase of 17.33 percent over the same period last year. Year-to-date the county has received $10,713,588, up 12 percent over last year at this time.

Counties may elect to have a county sales tax. Gregg County receives tax revenues based on sales in the county. Rusk County does not have a county sales tax.

In December, Kilgore received $583,046, an increase of 29.79 percent over last December’s $449,212.

So far this year, Kilgore hs received $6,907,585, about $1.6 million more than in 2004.

Longview is also reporting gains in sales tax allotments for both the month and the year. That city’s December check amounted to $1,696,146, up 18.73 percent from the $1,428,566 last year at the time. Year-to-date, Longview has received $22,087,058, a 9.55 percent increase over last year’s $20,159,976.

Gladewater’s numbers continue to increase also. For this reporting period, sale tax allocations there are up 15.2 percent totaling $62,254. Last year during this reporting period the city received $54,036. Yearto date, Gladewater has received a total of $792,801, up 10.92 percent from $714,731 last year.

Henderson is also showing growth in sales tax allocations. For December, the city received 21.94 percent more than for the same period last year. This allotment amounts to $267,637 as compared to $219,474 for the same period last year. Year-to-date Henderson has received $3,342,191 compared to last year’s $2,846,212.

Overton received $18,067 for this reporting period. For the same period last year, the city received $12,938 so sales are up almost 40 percent for this period. Year-to-date, Gladewater has received allocations totaling $207,704, up 7.94 percent from $192,417 last year.

Strayhorn reported sales tax allocations are up 19 percent in 22 counties that were declared disaster areas following Hurricane Rita.

“These sales tax numbers tell the story of Texans' heroic response to hurricanes Katrina and Rita,” Strayhorn said. “They show the generosity of Texans who purchased millions of dollars worth of clothing, household goods and emergency supplies for those in need. And the numbers reflect spending by thousands of evacuees, who were welcomed in cities throughout Texas.

“The numbers also show that after Hurricane Rita, Southeast Texans immediately bounced back and began to repair, replace and rebuild what they lost,” Strayhorn said. “Also contributing to stronger than average sales tax growth were the mining and utility sectors.”

In the hard-hit Beaumont-Port Arthur area, Beaumont's local sales tax allocation dropped 9 percent in November, but its December sales tax soared by 43 percent compared to December 2004. Port Arthur's sales tax allocation dropped 12.1 percent in November, but rose 23.7 percent in December. Orange, whose sales tax allocation declined 12.3 percent in November, saw a 42.8 percent increase in December.

Only 25 local governments in 22 Southeast Texas disaster counties show declines in their December sales tax allocations, compared to 73 local governments whose sales tax revenue dropped in November. Cities, counties, special purpose taxing districts and a transit system located within the disaster area lost about $271,000 in sales tax in December, compared to losses of $2.3 million in November.

Strayhorn's plan to help local governments whose sales tax revenue has declined since Hurricane Rita remains in effect.

“Some towns continue to lose sales tax revenue, because they have businesses that have not been able to reopen,” Strayhorn said. “I am offering local governments an option to help them with short-term fiscal problems caused by a sudden drop in sales tax revenue.

“Local governments in disaster counties can, if they wish, receive additional sales tax allocations for November and December to make up the difference between their November and December 2005 sales tax allocations and the amount they received last November and December,” Strayhorn said.