The Texas Comptroller reported yesterday that the City’s sales tax receipts for December (which reflect October sales) skyrocketed by 17.6% over last December. This is the third largest monthly year-over-year increase since I started keeping track in 2008.
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It is always dangerous to attribute stark changes in economic data like this to any particular cause, but it seems likely that this increase was driven by Harvey repair purchases. Anecdotally, my local Home Depot was packed every time I went in for weeks after the storm. There was also probably some boost from three of the World Series games being played here at the end of October.
The December receipts helped the City finish in positive territory for the calendar year, up 1.4% or about $8 million. However, sales tax collections are still well off their 2015 all-time high ($659 million vs. $638 million).
This year saw many extraordinary events that affected sales taxes. We had a Super Bowl, a Final Four, a World Series, a 500-year flood and its aftermath and a tepid oil recovery. All these make it difficult to draw too many conclusions from this year’s sales tax data. But the overarching theme seems to be that we are mostly trading sideways, which is, of course, similar to oil market. Notwithstanding our local chamber of commerce boosters’ boast about we have diversified our economy, I suspect that, for better or worse, our fortunes are still inextricably tied to the energy industry.
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Of course, there are other factors. The City continues to bleed off growth to its suburban neighbors (more on that soon) and on-line sales are relentlessly chipping away at sales tax collections. But if there is any conclusion to be drawn from the recent sales tax data, mine would be that we had better hope the OPEC deal holds and that the oil markets remain steady.
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