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Sales Tax in the Tank

Comptroller reports 12.5% drop in sales tax revenue

By Richard Whittaker, 12:20PM, Fri. Oct. 9, 2009

Comptroller Combs:
Comptroller Combs: ""Weakness is still evident in all major sectors of the state economy."

Another sign that the mythical recession-proof Texas economy is exactly that: A myth. In a press release cheerfully headlined "Comptroller Susan Combs Delivers $418 Million in Local Sales Tax Revenue," the comptroller announced that sales tax revenues fell 12.5% from this time last year.

That means a 7.6% drop in monthly sales tax allocations for local governments in October, 7.3% for cities, and 10.7% for counties.

So what does that mean for Travis County residents? Austin is down 7.7% from the sum for October 2008, whereas payments for the year to date are down 10.95% from 2008. The city has been hoping that second number would hold below 10% for the year, so that's a worrying sign. Similarly, Capital Metro's allocation is down 6.93% for the month and 9.98% for the year to date.

That may be the good news. Combs forecasts that monthly collections will continue to drop through the end of the year.

Maybe someone should pass on that information to Gov. Rick Perry, who recently took a lot of flack for claiming "Texas is kind of recession-proof."

Full press release below:

Comptroller Susan Combs Delivers $418 Million in Local Sales Tax Revenue

(AUSTIN) – Texas Comptroller Susan Combs said today the state collected $1.47 billion in sales tax in September, down 12.5 percent compared to a year ago.

"Declining sales tax collections, which began in February, have continued with September’s collections," Combs said. "Weakness is still evident in all major sectors of the state economy, including oil and natural gas, retail trade, and construction. Decreases in monthly collections are expected to continue through the end of 2009.”

Combs sent local governments $418.5 million in monthly sales tax allocations, a 7.6 percent decrease compared to a year ago. So far this calendar year, local sales tax allocations are down 3.7 percent compared to the same period in 2008.

Combs distributed monthly sales tax allocations of $282.8 million to Texas cities, down 7.3 percent compared to last October. Texas counties received sales tax allocations of $25.5 million, down 10.7 percent compared to a year ago.

The 153 special purpose taxing districts around the state got $16.7 million in sales tax revenue, a decrease of 1.4 percent compared to a year ago. Ten Texas transit systems received $93.3 million in sales tax, down 8.4 percent compared to a year ago.

The state and local sales tax figures represent sales that occurred in August.

For details of sales tax allocations to individual cities, counties, transit systems and special purpose districts, locate the Monthly Sales and Use Tax Allocation Comparison Summary Reports on the Comptroller’s Web site.

The Comptroller’s next local sales tax allocation will be made on Friday, Nov. 6.

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