Texas sales revenue growth is strong, comptroller says
Texas continued its record-setting pace in October with monthly sales tax revenue growing 7% year-over-year to $2.82 billion, according to Texas Comptroller Glenn Hegar.
Total sales tax revenue for the three months ending in October was up 4.1% compared to the same period a year ago. Sales tax is the largest source of funding for the state budget, accounting for 57% of all tax collections.
“Growth in state sales tax revenue was apparent across all major economic sectors,” Hegar said. “The most notable growth was in receipts from the construction, wholesale trade and information services sectors.”
In four other categories of monthly revenue, only one was down compared to the same month last year. Natural gas production taxes were down nearly 23% to $84.4 million.
Oil production taxes of $346.3 million were up 4.8% year over year. In September, both oil and gas production taxes were down, reflecting a slowdown in Texas’ energy-producing regions.
Taxes on motor fuel sales rose 4.6% to $311.8 million, up 4.6 percent from October 2018, Hegar reported. Taxes on sales and rentals of motor vehicles grew 10.5% to $484.5 million.
Sales tax revenues have set records for every month so far this year, and one all-time record for any month in May when collections surpassed $3 billion for the first time. Texas has not seen a drop in monthly collections since August 2017.
On Monday, Hegar also released the state’s annual cash Report, showing a cash balance in the state treasury of $8.4 billion at the end of the fiscal year on Aug. 31. That represents an increase of $3.9 billion, or 88%, from fiscal 2018.
“The change in the balance is largely due to an increase in tax collections. Balances in Special Revenue Funds increased from $21.4 billion in fiscal 2018 to $23.1 billion in fiscal 2019,” Hegar wrote in a letter to Gov. Greg Abbot.
The Economic Stabilization Fund, commonly known as the rainy day fund, ended fiscal 2019 with a balance of $10.1 billion, a decrease of $0.9 million compared to fiscal 2018, Hegar said.
The ESF ending balance was comprised of cash in the amount of $6.8 billion and investments having a fair market value of $3.3 billion. Net revenues for all funds excluding trust funds increased by $7.8 billion, or 6.5%, from fiscal 2018, to a total of $127.9 billion in fiscal 2019.
Tax collections totaling $59.4 billion accounted for the largest revenue category, with an increase of $3.8 billion, or 6.8%, from fiscal 2018. Federal income, the second largest revenue category, totaled $41.9 billion, an increase of $2.3 billion, or 5.8%, from fiscal 2018.
Total net expenditures for all funds excluding trust funds increased by $3.5 billion, or 3%, from fiscal 2018, to a total of $120 billion in fiscal 2019, Hegar said. The largest dollar spending increase by governmental function was in Health and Human Services, which increased by $1.5 billion to a total of $51.9 billion.