DALLAS - Texas sales tax revenues showed their weakest growth in years, rising 1.1% year-over-year in April to $2.3 billion, Comptroller Glenn Hegar said in his monthly report.
"As we predicted in January, state revenues have grown at a moderate pace," Hegar reported May 6. "April is the second consecutive month of relatively slow growth in sales tax revenue, and I remain cautiously optimistic about our economic progress."
In March, the sales tax receipts grew 1.5% year-over-year after soaring 11.7% in February and 11.2% in January.
Despite the modest increase, the April numbers represented the 61st consecutive growth in sales tax revenue, the largest income source for the state.
"Growth in total sales tax revenues collected this month was muted by the significant slowdown in the oil and gas mining sector," Hegar said. "However, collections from other major economic sectors - including retail and wholesale trade, restaurants, construction, and manufacturing - continued to grow."
Hegar will send cities, counties, transit systems and special purpose taxing districts their May local sales tax allocations totaling $759.8 million, up 6.1% compared to May 2014.
Of the state's 20 largest cities, only two saw decreased sales taxes in the latest report. The Austin suburb of Round Rock recorded a 6.4% drop, while the West Texas oil capital of Midland dipped 2.7%.
The report for April, which accounts for sales during the month of March, comes as the Texas Legislature considers the first sales tax cut in the state's history.
Under House Bill 31, unanimously approved in the Texas House April 28, the state sales tax rate would fall to 5.95% from the current 6.25%. The measure, now under consideration by the House-Senate Conference Committee, would be the first cut in the state's sales tax in Texas history.
However, the Senate's tax cut bill reduces property taxes instead of sales taxes. Lt. Gov. Dan Patrick, presiding officer for the Senate, vowed not to compromise with the House.
Job growth, sales tax collections and building permits still indicate that the Texas economy continues to outpace the national economy, according to an April 30 assessment by Hegar's office.
Over the past year, Texas added jobs in all of the 11 major industries, including professional and business services, trade, transportation and utilities, leisure and hospitality, education and health services, construction, mining and logging, government, financial activities, information, other services, and manufacturing.
Pre-recession Texas employment peaked at 10.6 million in August 2008, a level that was surpassed in November 2011. By February 2015 Texas added 1.13 million jobs, Hegar said.
