Texas keeps rolling with record sales tax collections
Texas sales tax revenue of $2.86 billion in July represents a 4.3% increase over the same month last year, Texas Comptroller Glenn Hegar reported.
While equal to the June results, the July figure represented the 21st consecutive record month for the fast-growing state.
The record for any month was set in May, when monthly sales tax revenues surpassed $3 billion for the first time.
“State sales tax revenue growth in July was moderate, with services and restaurant sectors leading the growth,” Hegar said. “Tax receipts from the construction, wholesale and retail trade sectors also grew modestly, while receipts from the oil- and gas-mining sector remained about the same as a year ago.”
Total sales tax revenue for the three months ending in July 2019 rose 5.6% from the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 57% of all tax collections.
Motor vehicle sales and rental taxes, another source of state revenues, climbed 10.6% to $483.6 million compared to July, 2018.
Motor fuel taxes of $311.1 million slipped 0.6% from July 2018.
Natural gas production taxes of $129 million jumped 11.3% while oil production taxes of $312.4 million were up 7% from July 2018.
On July 19, the Texas Workforce Commission reported that In June, the Texas economy added 45,000 seasonally adjusted nonfarm positions. After shattering the all-time low in May of 2019, the unemployment rate fell again to 3.4%t. The new record is the lowest the unemployment rate has been since series tracking began in 1976.
“June’s unemployment rate is a historic win for employers and workers across the state,” said TWC Chair and Commissioner Representing Employers Ruth R. Hughs.
Texas employers added 315,600 jobs over the year. Total nonfarm annual employment growth was at 2.5% in June and has held above 2% since February 2018.
Leading job growth this month was the Trade, Transportation, and Utilities industry adding 10,500 jobs in June followed by Leisure and Hospitality which added 10,000 jobs and Other Services adding 6,600 jobs.
On Friday, Dallas-based Comerica Bank reported that its Texas Economic Activity Index grew 0.8% in May to 139.0. May's index reading is 44 points, or 46%, above the index cyclical low of 95.5. The index averaged 134.6 points for all of 2018, 5.7 points above the average for 2017. April's index reading was revised to 137.9.
The Comerica Bank Texas Economic Activity Index increased for the fifth consecutive month in May, consistent with an ongoing moderate-to-strong GDP expansion for the state in 2019, economists said. Recent job growth has accelerated. April and May produced net job gains of around 32,000 for Texas, noticeably above the average of around 20,000 per month from November through March.
For the year ending in May, Texas payrolls were rose 2.4%, well ahead of the U.S. average of 1.6%. Payroll employment has been a positive for the Texas Index for 20 consecutive months. Other positives in May were unemployment insurance claims, housing starts, industrial electricity demand, total state trade, hotel occupancy and state sales tax revenues, the bank said.
"House prices and the drilling rig count were negative factors in May," the report said. "Even though oil production remains strong, the Texas rig count has been on a declining trend since peaking at 540 rigs last October. The latest numbers, for the end of July, show a steep decline to 454 rigs."
Texas carries triple-A ratings from four ratings agencies.