November's tax revenues close in on city's record

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“Very close to the highest-ever.”

Just $5,000 more, and the City of Kilgore’s November sales tax check would have been a record-breaker.

According to Kilgore City Manager Josh Selleck, the monthly allocation from the Texas Comptroller’s Office – Glenn Hegar won re-election to a second-term this week – was just shy of beating a decade-old high for the community.

At $1,194,832.12, the allocation of sales tax revenues announced this week is a 37.26 percent increase on the same check a year ago, continuing Kilgore’s steady increase in the regular returns.

There’s a catch, though.

“People see this and it gives them a false hope it’s bigger than it is,” Selleck said Friday. “The reality of it is, we have to be careful.”

As exciting as the million-plus number is, he added, it has to be kept in context, and it doesn’t change the fact the city can’t rely on sales tax to fund ongoing operations.

“These are dollars that will only ever be spent on one-time maintenance projects, one-time quality of life projects … whatever the council determines they should be spent on,” Selleck said. “All those extra dollars that come in mean there are more roads that can be maintained, more one-time projects that can be done.

“I feel like it’s really important to be more and more clear about what we know, which is that nearly 100 percent of the growth is from a very, very, very small number of companies. There’s a single company that has accounted for the entirety of this growth.”

Details about that company cannot be shared due to restrictions set by the comptroller’s office.

Elsewhere, “We see small growth numbers from other companies, but there are other companies that still have offsetting declines,” the city manager added. “From our budget methodology, we’re still where we were two years ago. Our base number is still about $5.1 million which is what it was about three years ago, which is why we started using it as our base for sales tax.”

All that said, the November 2018 does become the second-highest sales tax allocation Kilgore has ever received.

“Our previous second-highest-ever was in August of this year,” Selleck noted. “The highest-ever was back in February of 2009 – that number was about $5,000 higher than this.”

Don’t count on the monthly sales tax allocations as a regular pattern, Selleck cautioned.

“We don’t know how long that will last," he said.

Statewide, Hegar is distributing $817 million in local sales tax revenues this month, a 5.4 percent increase on November 2017.

According to the comptroller’s Wednesday release, “These allocations are based on sales made in September by businesses that report tax monthly, and sales made in July, August and September by quarterly filers.”

In Kilgore, City Hall receives two-thirds of the monthly sales tax revenues. The remainder benefits Kilgore Economic Development Corporation.

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