DALLAS – Despite a slump in oil and gas revenues, the Texas economy showed signs of resilience in the April sales tax report, according to state Comptroller Glenn Hegar.

“The modest growth in state sales tax revenue reflects increased business spending in some sectors,” Hegar said. “While net collections from oil and gas companies remain depressed, receipts from the manufacturing and wholesale trade sectors were up markedly. The results of consumer spending appear mixed, with increased tax collections from restaurants but a slight decrease in retail trade.”

State sales tax revenues collected in March and counted in April were $2.44 billion, up 2.5% over the same month last year, Hegar said.

The April figures represented a third straight monthly increase in 2017 after collections dipped slightly in January.

Total sales tax revenue for the three months ending in April 2017 was up by 3.3% compared with the same period a year ago, Hegar said.

Sales tax revenue is the largest source of state funding for the state budget, accounting for 58% of all tax collections in fiscal 2016. Texas does not impose an income tax.

Motor vehicle sales and rental taxes, motor fuel taxes and oil and natural gas production taxes are also large revenue sources for the state.

Oil and gas production taxes appeared to soar nearly 94% to $285 million, but Hegar said the anomaly was due in part to refunds provided to natural gas severance taxpayers in April 2016, which resulted in artificially low tax collections during that period.

Motor fuel taxes of $316.1 million were up 4.4% from April 2016, indicating increased consumption and travel.

Sales taxes on motor vehicles were down 11.2% to $222 million. But that was due to counties retaining 5% of those taxes for the month. State law allows counties to take the 5% share in April, May or June.

“While net collections from oil and gas companies remain depressed, receipts from the manufacturing and wholesale trade sectors were up markedly," said Texas Comptroller Glenn Hegar.
“While net collections from oil and gas companies remain depressed, receipts from the manufacturing and wholesale trade sectors were up markedly," said Texas Comptroller Glenn Hegar.

“The large drop in year-over-year motor vehicles sales and use tax collections is due to more counties retaining that commission in April 2017 as opposed to last year,” Hegar said. “Collections are expected to return to their projected levels once counties have completed retaining their commissions from fiscal 2016.”

Despite the continuation of low futures prices for oil, the Texas rig count averaged 368, a roughly 43.5% increase from 257 during the first three months of 2016.

More than 3,250 drilling permits were issued by the Texas Railroad Commission, up from 1,594 in the first quarter a year ago.

Despite the rising rig count, oil production was 3% lower than the same month last year, according to state figures.

Recovery of natural gas decreased 7.5% to about 2 billion cubic feet.

For the quarter, wellhead prices of crude oil averaged $48.47 per barrel, 60.8% higher than the first quarter of 2016, increasing the value of Texas-produced crude to $14.1 billion.

Natural gas averaged $2.88 per thousand cubic feet, 51.7% more than a year ago, placing the value of Texas natural gas at $5.55 billion.

The number of Texans employed in the industry was down 6.1% from about 212,000 in the first quarter of 2016. The number this year was about 199,000.

However, employment in the Texas construction industry rose 4% last month, according to the Associated General Contractors of America. Nationally, the Dallas-Plano area ranked fifth for construction job growth, adding 6,000 jobs or 5% to the previous number employed.

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