Finally, a Good Monthly Sales Tax Number – Which May Brighten Texas Finances

AUSTIN -- On the eve of making his two-year revenue estimate, Texas Comptroller Glenn Hegar on Wednesday reported some good fiscal news - finally.Last month, state sales tax receipts jumped by 4.9 percent over December 2015, the biggest single-month percentage increase in more than a year and a half."Sales tax revenue growth was led by collections from sectors driven by consumer spending - retail trade and information services," Hegar said in a written statement.But don't read too much into it.As Hegar noted, "Tax receipts from oil- and natural gas-related sectors continued to decline relative to the previous year."Also, December's sales tax bump wasn't enough to jolt fiscal 2017 revenue trends into the black.The first four months of the state fiscal year usually produce 32 percent to 33 percent of the annual sales tax haul, noted Eva DeLuna Castro, budget analyst for the center-left think tank the Center for Public Policy Priorities.Fiscal 2017 began Sept. 1.At current collection rates, the state would wind up the year with between $1.3 billion to $2 billion less than the $30.5 billion of sales tax that Hegar predicted in October 2015. At the time, the Republican comptroller was certifying there'd be enough revenue to cover the two-year budget passed by the 2015 Legislature."It is good," DeLuna Castro said of December's $2.44 billion in sales tax collections. "But it needs to get a lot better in order not to end the biennium with a serious sales-tax shortfall."Texas' 6 ¼-cent sales tax generates 58 percent of state tax revenues.Hegar noted that last month, there was a healthy increase of 7.5 percent in collection of motor-fuels taxes, compared with December 2015.In the first half of the current two-year budget cycle, Hegar forecast sales tax money would increase by 1.2 percent. As his aide Tom Currah testified last month, receipts actually shrank by 2.3 percent.For the current fiscal year, Hegar predicted more than a year ago that sales tax revenue would grow by a stout 4.8 percent. That now seems unlikely.Still, for all types of general-purpose state revenue, last month may have marked a turning point.Taxes, fees, interest and investment income produced just shy of $4 billion in December, according to documents on Hegar's website. That was a gain of 0.8 percent over a year earlier. However, for the first four months of the fiscal year, general-purpose revenue collections were down by nearly 1.5 percent from the same period a year earlier.On Monday, Hegar is expected to release his biennial revenue estimate. It sets a ceiling on how much lawmakers may spend in this year's session, which begins the next day.(To see Hegar's spreadsheet on revenues this fiscal year, click here. Under "Associated Data Files," choose the first item under "General Revenue-related Fund.")  Continue reading...