Groovy's Forney, Texas

KAUFMAN COUNTY, Texas — Sales tax revenues remain strong across the majority of Kaufman county despite a statewide decline according to the Texas Comptroller’s office this week.

State sales tax revenue is down 9% compared to the comparable period last year — the steepest decline in more than 10 years — and Texas Comptroller Glen Hager expects those numbers to continue to fall.

“Next month’s remittances likely will show steeper declines compared to a year ago, as the effects of both the shuttering of businesses related to COVID-19 and plummeting oil prices were manifest throughout April,” Hegar said. “State sales tax collections declined as a result of efforts to stem the spread of COVID-19 through business closures, crowd limits and stay-at-home orders adopted in the state, as well as a precipitous drop in worldwide demand for oil.”

The May sales tax rebate payment represents the city's portion of sales taxes collected at local merchants in March and reported to the Comptroller's office in April.

“The steepest declines in tax remittances were from businesses most quickly and dramatically affected by social distancing: restaurants, performing arts venues, movie theaters, theme parks and fitness centers, as well as department stores and boutique retail shops,” Hegar said. “However, those losses were, to a degree, offset by increases from big-box retailers, grocery stores and online vendors. Remittances from oil- and gas-related sectors also fell significantly as oil and gas exploration and production companies slashed capital spending in response to the crash in oil price.”

The city of Forney reported receiving $888,341 in sales tax rebate revenue in March, representing an increase of 9.49 percent from the $811,310 received in May 2019. For the year to date, Forney has taken in over $ 3.68 million, a rise of 11.86 percent from the $3.29 million received through May of last year.

Sales taxes are one of the two main sources of revenue, along with property taxes, which feed each city’s general fund.

“Tax revenue is the General Fund’s largest source of income and makes up 83% of the revenue collected,” says Forney City Manager Tony Carson.

Comparatively, the city of Terrell reported receiving $1.06 million in sales tax during the same period, representing an increase of 3.58 percent from the $1.03 million received in May 2019. For the year, Terrell has taken in over $5.5 million, a 13.74 percent increase from the $4.84 million received during the same time last year.

The city of Kaufman reported $290,433 in sales tax, a small increase of 3.58 percent, from the $281,345 reported last year. The city of Kaufman has taken in $1.33 million year to date, an increase of 4.14 percent over last year’s $1.28 million.

The cities of Crandall and Combine both saw small decreases in their sales tax revenues.

Crandall sales tax revenues were down 7.17 percent, only $63,483 compared to $68,389 a year ago. Combine is also down 8.33 percent, with just $9,464 reported, however, both cities have shown strong increases in their year to date numbers. Crandall’s year to date sales tax numbers are up 28 percent, collecting over $305,689 compared to last year’s $238,619. Combine has increased by 41 percent, improving their year to date collections from $34,123 to $48,210.

The city of Kemp had one of the largest increases, 19.68 percent, increasing their collections from $30,515 to $36,523 for March. Kemp has increased its year to date collections by 9.22 percent, up from $141,705 last year the city has collected $154,783.

The city of Mabank also reported increases of 10.69 percent for the month, and a 10.31 percent increase on the year totaling over $766,006.

“The recession associated with the financial crisis more than a decade ago began in December 2007 and lasted 18 months, but Texas did not see significant sales tax declines until early 2009. While the effect on sales taxes from the current economic contraction has been more immediate, the impact of rising unemployment and contracting economic activity in many parts of the state’s economy, including oil and natural gas exploration and production, likely will act as a drag on sales tax revenue for many months,” Hegar says.