Sale tax allocations from the state entered the second month in a row of sharp declines for area jurisdictions reeling from the COVID-19 pandemic and energy industry slump.
Kilgore saw allocations drop 44.16% to $447,349 from $801,240 a year ago, Gregg County felt a decline of 26.03% to $1.01 million from $1.37 million and Longview’s collections fell by 23.19% from $2.84 million to $2.18 million.
Texas Comptroller Glenn Hegar reported Wednesday he will send cities, counties, transit systems and special purpose taxing districts $690.4 million in local sales allocations for June, 11.7% lower than June 2019. The figures are based on sales transactions in April, the first full month that saw the effects of business shutdowns intended to combat the spread of the new coronavirus.
Kilgore City Manager Josh Selleck and Mayor Ronnie Spradlin, along with Gregg County Judge Bill Stoudt, were unavailable for comment Wednesday. Kilgore has been buffeted by the energy industry downturn, which itself was affected by the pandemic.
Longview city spokesman Shawn Hara said city officials anticipated a significant drop in sales tax allocations this month. He said the 23.19% drop was $543,179 less than what city officials had budgeted for the month.
And for the fiscal year starting in October and through June, Longview is $1.28 million below what city officials had budgeted from sales taxes, Hara said.
“Back in March, the city manager put in place a hiring freeze and requested that the departments restrict discretionary spending,” he said. “We also put on hold several large projects. We put on hold the street repaving scheduled for this year.”
City officials also delayed construction of a parking lot for the Guthrie Trail, Hara said.
Other jurisdictions experienced drops, including 18.46% in White Oak, 12.17% in Lakeport and 6.2% in Marshall.
However, several area cities are receiving more tax allocations this month than they did a year ago. They include 21.52% in Gilmer, increasing from $149,341 to $181,489; Henderson at 16.81%, growing from $446,276 to $521,318; and 14.35% in Ore City, growing from $16,399 to $18,753.
Gilmer City Manager Greg Hutson attributed the increased sales in April to residents adhering to the stay-at-home order from Gov. Greg Abbott, spending their money inside their community.
“Typically, prepandemic, there was a lot of sales tax leakage to Longview and Tyler, or any other big city,” Hutson said. “With this stay-at-home order, everybody stayed here in Gilmer and did all their shopping they needed.”
Hutson said restaurants stayed “incredibly busy” with takeout orders.
He said he feels for the cities that will see allocation declines this month.
Henderson Mayor John W. “Buzz” Fullen said he is happy the city’s sales tax disbursements will increase this month. He said big-box retailers such as Lowe’s and Walmart in Henderson have stayed open during the pandemic and are not hurting financially.
“Well, it is looking good right now,” Fullen said. “Most of the people are social distancing. I think, overall, things are going to shape up and look a lot better for us.”