Texas Tax Revenues Decline
Tax revenues for the Lone Star State fell for the fifth straight month in September as oil and gas operators keep spending low.
Related: Some Eagle Ford Schools Fighting to Survive
The Texas Comptroller’s office reported the state’s lowest September sales tax collections since 2013 with a decline of 3.9% below the same month last year.
The Texas budget relies on sales taxes, which account for 58% of all statewide tax collections. As the shale boom subsided, the decrease in spending in the oil and gas sector has begun to affect the state budget. The Comptroller’s report showed:
- Sales tax revenue were at $2.13 billion in September (down 3.9%)
- Natural gas production tax: -14.66%
- Oil Production and Regulation Taxes: -2.52%
“Subdued spending for oil and gas drilling continues to depress sales tax revenue,” Comptroller Glenn Hegar said in a statement. “Consumer spending also appears to have slowed, as sales tax collections from retail trade were down from the previous year. In contrast, construction sector receipts continued to grow.”
One effect of lower taxes is the lower amounts of money flowing into Eagle Ford school districts. During the height of the shale boom, the drilling frenzy brought $1.5 billion in property tax revenue for local Eagle Ford schools and another $676 million for the Permanent School Fund. But as the oil and gas activity dried up, so have the tax revenues that fund local school districts.
The bust now threatens to be a serious financial blow to many districts. For the upcoming 2016-2017 school year, some are facing serious deficits and others will delay pay raises and hiring in order to juggle their budgets.