LOCAL ECONOMIC SNAPSHOT | SALES TAX REVENUE

Consumers spend, receipts rebound

By BILL BOWEN
Staff Writer bbowen@dallasnews.com

KYLE ALCOTT
Staff Artist kalcott@dallasnews.com

Sales tax receipts are a direct gauge of consumer and business spending. The monthly receipts confirm other measures that indicate the beginning and end of the recession. Now the sales tax revenue for Texas cities is on its way to a record, with receipts up 12 percent for this fiscal year and 8 percent for the first two months of 2012.

Statewide receipts
Sales tax receipts for all Texas cities combined:
(In billions) 6 5 4 3 2 1 0 07 08 09 10 11

Rate of recovery among the largest metro areas in Texas

San Antonio and Houston are going gangbusters in their recovery. Fort Worth and Austin are middling, and Dallas and El Paso are trailing the pack. Percentage change, first three months of 2012 vs. first calendar quarter of 2011:

$4.1 billion

Fort Worth*

Dallas

8%

6%

City collections
Dallas saw sales tax receipts plummet 9.8 percent from 2008 to 2010. But the take is up 8 percent so far this year.
(In millions) 250 200 150 100 50 0 07 08 09 10 11 Dallas $215.4 *Greater metropolitan tax area

Austin*

7%

El Paso

4%

San Antonio*

11%

Houston*

10%

Fort Worth
Arlington Irving

$105.4 $86.1 $47.7

State sales tax revenue compared with other major taxes

Sales tax is Texas largest revenue source. At almost $12 billion during the first half of the fiscal year, it provides more cash to state coffers than all other revenue sources combined.
(In millions of dollars)

The big dip

Sales tax receipts took a dive across 2009 and 2010. The dips in sales tax receipts show how deeply each area was affected by the sharp decreases in consumer spending. CITY Austin Dallas Fort Worth Houston San Antonio El Paso CHANGE -11% -10% -8% -6% -6% -5%

Tax type Sales Motor vehicle sales/rental Motor fuel Franchise Insurance Natural gas production Cigarette and tobacco Alcoholic beverages Oil production/regulation Inheritance Utility Hotel occupancy Other
*Fiscal year 2012; year to date

February $2,021.3 $292.8 $252.4 $22.1 $473.2 $139.1 $168.6 $70.4 $186.2 $0.1 $4.8 $28.9 $68.7

FY 2012* $11,739.6 $1,659.6 $1,565.3 -$151.3 $538.4 $886.0 $707.2 $447.5 $943.9 -$0.1 $219.4 $183.4 $657.5

Percentage change from 2011 12.3% 19.7% 0.6% 27.6% 34.9% 72.9% -1% 8% 49% -111.5% 4.1% 9.9% 5%

Note: Texas fiscal year runs Sept. 1-Aug. 31

SOURCE: Texas Comptroller of Public Accounts

The bottom line

Remember that retail sales is just one part of consumer spending. If you go to a doctor or lawyer or are paying tuition at SMU, that money is not counted in the sales tax figures. Nonetheless, sales tax revenues are not only an indication of how the economy is doing, but its also an indication of how well the state treasury is doing. Bud Weinstein, economist at Southern Methodist University It tells you that the Texas economy is doing well. Some of it is spending for an auto, some of it is spending for electronics, some of it is clothing. Some of the sales increase is population growth, with more people moving here. But some of it is job growth and some of it is income growth. Sales tax revenues are important to state and local governments as one of the largest sources of income. But sales tax receipts also give us one more measure of the economy and give us another way to look at things, with some surprising results.

Mine Yucel, senior economist and vice president at the Federal Reserve Bank of Dallas

Bill Bowen, staff writer, The Dallas Morning News