Is the tide turning?

Sales tax numbers locally swell over 2009 figures thanks in part to highway construction, City says.

By LPR Staff
Editor/POST-REGISTER

Figures released recently by the State Comptroller’s Office suggest the economy might be moving forward. Although statewide unemployment still hovers near nine percent, job growth has been slowly on the rise throughout the last qua

rter of 2010, and consumer spending seems to be following suit.

“Sales tax revenue has now grown for eight consecutive months compared to [levels a year ago],” State Comptroller Susan Combs said in a written release on Dec. 8. “November’s monthly gain showed growth in a range of sectors like manufacturing, the oil and natural gas industry, retail trade and restaurants.”

On a local level, those figures translated to a sales tax revenue increase of 22 percent for Caldwell County as a whole, over the November 2009 payment.

Luling led the charge in sales tax revenue for the payment period, receiving sales tax revenues of $94,107.14, and increase of more than 25 percent over last year.

Lockhart sales taxes generated $145,598.72 in November, a 20.6 percent increase.

Much of Lockhart’s increase, according to City Manager Vance Rodgers, is likely a result of the ongoing construction of State Highway 130. Because the road is being built and maintained by a private entity, rather than by the Texas Department of Transportation, the project is not tax exempt. Therefore, sales tax attaches to the goods and services purchased locally in connection with the project.

“We’re very cautious about the trend, because we understand that it might not continue,” he said.

In addition to the construction project itself, Lockhart and the surrounding areas are enjoying residual impacts from the construction because crews eat and shop locally, purchase equipment locally and stay in local hotels. All these activities lead to a boost in sales tax revenues.

“I talked to the people in Hutto and they experienced the same thing while construction was going on there,” he said. “So even though we know this trend could be temporary, we’re going to enjoy it while it lasts.”

Sales tax revenues are used to pay bonded indebtedness for the city, as well as to help support the general fund and the everyday operations of the City of Lockhart.

If the trend continues, Rodgers said, it might be necessary for the City Council to make a formal budget amendment to adjust for additional revenues. However, the early stages of the trending make it unclear whether that will be necessary.

“We report the revenues to the council quarterly anyway, and if we need to make a budget amendment, we will,” he said. “We just have to be cautious at this point. A few years ago, we saw a spike like this, and then it bottomed out the next month. So we just don’t know, but we’re watching it.”

To date, Lockhart has collected more than $1.7 million in sales tax revenues. At this point in 2009, the city had collected just over $1.59 million.