City skeptical of sales tax surge

January's year-to-year gain breaks old record

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This month’s sales tax check from the Texas Comptroller’s Office is well out of the ordinary – in the best way – leaving Kilgore City Manager Josh Selleck puzzled and a little suspicious, but optimistic nonetheless.

At $878,829.04, the January 2018 revenue allocation from the state is a whopping 84.29 percent more than the same month last year. That’s after the state removed $33,627.19 in an adjustment from total collections of $900,851.99, based on November sales by businesses that report taxes monthly.

It’s a record-setting jump as far as the percent-change, not quite doubling January 2017’s allocation of $476,864.30. It’s also just shy of the record in the total difference between one year and the next: the largest jump in the past 12 years was about $408,000, between May 2013 and May 2014.

The sales tax revenue allocation from Texas Comptroller Glenn Hegar’s office marks 11 months of consecutive year-to-year gains in the monthly checks. From the revenues, Kilgore City Hall receives two-thirds while Kilgore Economic Development Corporation nets the remainder.

On the city’s side, January’s check brings total collections for the Fiscal Year to about $2.1 million, a little more than 41 percent of the $5.1 million projected for FY2018. It puts the city’s monthly average at almost $524,000, well ahead of the $425,000 monthly goal necessary to hit the year’s projection.

The News Herald’s records track sales tax data back to 2005. According to those numbers the last, largest percentage change in a 12-month period was another January return: the sales tax allocation from the state jumped 64.45 percent between the first month of 2010 and the same in 2011, a $604,000 check compared to one a little shy of $1 million a year later.

Welcoming January’s gift horse, Selleck’s taking a good look at its teeth: in any given month, there can be adjustments, payments and deductions that skew the data.

“Even as compared to 2015 and 2014 numbers, this looks high,” he noted. That said, “We’ve seen January anomalies before,” in 2011, 2013 and 2016.

In January 2015, the community’s sales tax allocation was about $753,700. A year before, the check was $713,661. The anomalous years Selleck noted saw payments of $890,840 in January 2016, $971,471 in 2013 and $993,377 in 2011.

“I’m going to guess that we’ll find an anomaly in here,” he said Wednesday afternoon.

That outlier hadn’t made itself an apparent by press time Friday.

Either way, Selleck said, the month’s allocation from November’s sales is good news.

“Nonetheless, I imagine we’ll find that the base is continuing to grow, regardless of this anomaly,” he concluded. “I think we’re hearing that from industry leaders in the area.

“It’s definitely a sign of good things to come.”

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