Sales tax shows first year-to-year drop since 2017

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After a rocky recession, the City of Kilgore’s sales tax revenues have been steadily climbing for about two years.

The streak of gains stumbled this month.

At $762,703.26, January’s revenue check from the Texas Comptroller’s Office shows a 13 percent decline compared to the same time last year. The revenues are based on sales made in November by businesses that report taxes monthly.

“It’s still a very substantial increase over 2017,” Kilgore City Manager Josh Selleck said Friday.

A year ago, the city’s sales tax allocation came in at $878,829, a hefty 84.29 percent jump on January 2017’s funds.

Statewide, Texas Comptroller Glenn Hegar announced Wednesday his office is sending taxing entities $734.7 million in local sales tax allocations for January. It’s a 3.6 percent increase compared to 12 months prior.

In Kilgore, City Hall receives two-thirds of the regular revenues while Kilgore Economic Development Corporation utilizes the remainder.

One-third into the city’s October-through-September fiscal year, January’s allocation brings collections ($2.63 million) to 43.11 percent of the $6.1 million projection for FY2019. KEDC has netted about $986,000 from collections so far this year.

Collections for Gregg County were $1.43 million in this month’s check, a 3.18 percent increase from January 2018.

The year-to-year decline in the first allocation of 2019 doesn’t come as a surprise to Selleck. Rather, recent months have been over-performing compared to city planners’ calculations.

“In short, directly in line with what we’ve been expecting,” Selleck confirmed. “This is really a more appropriate level of sales tax for where we are in the recovery.”

“As I drove by WalMart and saw $1.78 gas, we’re obviously in a period of huge amounts of fluctuation in the oil and gas economy. We’re keeping an eye on it and this is exactly why we budget the way we do.”

Locally, the funds are used for one/off projects like street maintenance, rather than operations.

“It’s amazing to me; four years ago I wouldn’t have thought I’d be talking about a 13 percent decline this way – our budget can handle it. It really speaks to the budget method that the council’s adopted, that this smooths out the rifts.”

Audit collections and adjustments by the state can impact the monthly allocations. This month, however, Selleck said he didn’t know of any particular adjustments that might have affected the revenues.

That said, “I believe there was one last year that made it higher.”

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