DALLAS – Amid growing signs of economic weakness, December sales tax revenues in Texas fell 1.1% below the same month in 2014 to $2.33 billion, according to state Comptroller Glenn Hegar.
Sales tax revenue for local governments fell 0.1% to $617.2 million, Hegar reported. The figures represent taxes collected in November, tabulated in December and distributed to local governments in January.
"As with the previous two months, December sales tax revenue was down largely due to spending reductions in oil- and gas-related sectors," Hegar said. "This was expected, given ongoing weakness in oil and natural gas prices. Remittances from other sectors, such as construction and information, continued to grow."
In the heart of the oil- and gas-producing Permian Basin of West Texas, collections for the city of Odessa fell nearly 16% to $3.23 million.
Neighboring Midland's sales tax revenue dropped to $4.23 million, a 23.84% decline from the same period of 2015. The drop was the steepest among the state's 20 largest cities.
The Ector County Hospital District in Odessa saw revenues fall nearly 35% to $2.45 million. In December, Standard & Poor's dimmed its outlook to negative on the district's A-minus credit rating, citing "weakened operating results for fiscal 2015 and our expectation of continued operating pressure at least through fiscal 2016."
The district issued $47.9 million of bonds in 2010 to build a 100,000-square-foot women's and infants' center.
In the state's largest city of Houston, revenues were down more than 2% to $51 million, according to the report. As the nation's energy hub, Houston has been most affected by the downturn in oil and gas prices.
By contrast, Dallas saw sales tax revenues rise nearly 7% to $20.5 million. Dallas' suburbs showed sharply contrasting numbers, however, with Irving recording the highest revenue gain of 11.3% among the top 20 cities, while the northern suburb of Frisco suffered an 8.4% drop.
Dallas-based Comerica Bank reported that its Texas Economic Activity Index fell to 94.8 in October, down 0.7 percentage points from September. The decline brought the index to its lowest level in nearly four years.
"The V-shaped recovery in oil prices and in the oil industry in general that we saw in 2008-2009 is not going to happen this time," said Robert Dye, Comerica's chief economist.
Oil exploration and production accounts for about 10% of the state's economy.
"What happens to the other 90% of the state economy? Fortunately, that's not withering up and blowing away," Dye said. "Texas does have a diverse economy."
