December 12th, 2019

December sales tax collections are in, and for the first time they included the results of the new Single Local Rate program. The Comptroller reported a 7.8% increase in local allocations, with cities seeing an increase of 7.3%.

The 7.3% city growth in December caps off a positive second half of 2019, which saw growth of 3.8%, 9.4%, 3.9%, and 2.7% from August through November. In fact, statewide allocations grew each month in 2019.

The 10 largest cities (in terms of sales tax revenue) all saw increases, with El Paso and Round Rock leading the way at 23% and 19% growth, respectively (although El Paso's growth is largely attributable to a negative audit adjustment in December 2018). Houston, Dallas, Austin, and Fort Worth all saw commendable growth as well.

On the other side of the aisle, 7 cities saw 6-digit declines in December (Oyster Creek did as well, but that was the result of a sizable Prior Period Payment in December 2018).

Single Local Tax Impact

This was the first month of the Single Local Tax's implementation, and Texas cities saw a boost to their allocations of 0.34%. $1.8mm was distributed to Texas cities as a result of this new program. That's about $0.06 cents in sales taxes for each Texas resident. 

As we mentioned previously, one of the logistical impacts of the Single Local Tax's construction is that outsized benefits accrue to cities that import more of their sales tax. This is evident when looking at Sunset Valley, whose Single Local Tax haul was around $2.60 per resident.

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