Texans Are Cutting Back, Wheels Come off Houston Economy
by Wolf Richter
WolfStreet.com
October 8, 2016
Retail sales in Texas boomed for five years straight, from March 2010, their low point during the Great Recession. Sales tax collections jumped 46% from the first half of 2010 through the first half of 2015 – dizzying growth for a mature market! Given the size of the Texas economy, it helped prop up US retail sales. But by May 2015, 10 months into the oil bust, things began to sag.
Sales tax collections in September for sales that occurred in August dropped 3.5% year-over-year, according to the Texas Comptroller of Public Accounts. And in August, sales tax collections had dropped 3.0% from two years earlier. This was only the second time since the depth of the Financial Crisis that collections were lower than two years earlier, the first time having been in June!
Year-to-date, sales tax collections fell 2.5% to $21.4 billion, and were practically flat with collections two years ago. On a per-capita basis, given the growth of the Texas population (up 8% since 2010), it looks even worse.
Sales tax collections aren’t an ideal gauge. Many food products are exempt. Taxes on motor vehicle sales and rentals are not included in this tally but are reported separately. The data is not seasonally adjusted, so it can only be compared to the same months in prior years. But it’s an unvarnished approximation of the movements of retail sales.
The Rest…HERE
