Sales tax down by double digits again

February 12, 2010

Sales tax down by double digits again

The Texas budget got another blow today when State Comptroller Susan Combs announced sales tax collections are down 14.2 percent compared to a year ago.

Sales tax collections first started declining in February 2009, and there have been double-digit decreases since June. Today's figures reflect January collections

Lawmakers already are expecting to face a shortfall that could be some $13 billion to $17 billion when they meet in regular session next year to write the next two-year state budget.

Combs had predicted the state would collect $21.2 billion in revenue from the sales tax in the current fiscal year that started Sept 1, a bit more than the $21 billion collected in the 2009 fiscal year.

So far, however, collections are about $1.2 billion below the amount that had been collected last fiscal year at this time.

The state budget relies on the sales tax for more than 56 percent of state tax revenue and more than 24 percent of overall revenue.

"Collections continue to be down in major industry sectors like retail trade, oil and natural gas production, construction and manufacturing," Combs said in a statement.

"January's sales tax revenue was down by double digits compared to January 2009, which was the third highest collection month ever and was also the last month of year-over-year growth," she said. "We will continue to closely monitor sales tax revenue, and although we expect further collection declines in the near term, it is anticipated the rate of decline will moderate and then return to revenue growth sometime in the second quarter of 2010."



nancy@callnancyfurst.com