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Local News

September 13, 2013

Port Arthur leads area in sales tax revenue loss

Much of Jefferson County bucked state trends this month by showing a reduction in sales tax revenue payments collected for monthly sales made in July.

Statewide, $575 million was allocated, up 2.8 percent from the same time a year ago, according to the latest data released by State Comptroller Susan Combs’ office.

Year-to-date figures for the state reflect a 6.7 percent increase above the same time period in 2012.

Jefferson County as a whole showed a decrease of 19.83 percent for July sales payments compared to the year previous.

2013 payments to date equal $18,688,028 compared to $18,286,559 in 2012.

Port Arthur July sales tax revenue reflected the largest decrease, from $1,400,915  a year ago July to $833,437 this July, for a 40.50 percent loss in sales tax dollars.

To date, Port Arthur has received $12,678,195  compared to $13,741,564  for the same time period a year ago — a 7.73 percent loss.

Echols said it was difficult to determine why the sales tax revenue reflected a sharp decline, but that July was not the first month a loss was indicated.

“Sales tax information is confidential, so we just don’t know who sells what in the city,” Echols said.

Since May, the city has experienced a downward trend, though July’s loss was the largest.

Though many of the construction projects are winding down, most of those are in the city’s extra-territorial jurisdiction, an area that is not required to pay sales tax revenue to the city.

“Port Arthur’s largest sales tax is generated from electricity sales, and that type thing,” Echols said.

Sales tax revenue makes up a part of each city’s budget, and can be tricky when figuring it in advance, Echols said.

To avoid fluctuations, the city looks at historical data, and figures conservatively when preparing budgets.

In the current 2012-2013 budget year, the city of Port Arthur figured its budget with a projected $17 million in sales tax collections both from the city and Port Arthur Economic Development Corporation.

The city used the same figure in its proposed 2013-2014 budget, Echols said.

The city of Groves also showed a 5.75 percent loss in July sales taxes allocations with a net payment this year of $118,506 compared to $125,746 the year prior. Payment to date for 2013 totaled $1,282,014 compared to $1,310,119 in 2012 for a loss of 2.24 percent.

City Manager D. Sosa couldn’t pin down the reason for the loss, but feels optimistic that sales taxes will increase in the coming months as new businesses open up in the city.

When the sales tickets were totaled for the year, Groves saw $50,000 more than what was budgeted in 2012-2013 budget.

Sosa said the city uses a 10-year graph formula to project sales tax revenue in future budgets. He’s found the procedure to be reliable.

“We hit it almost always right on the money,” Sosa said.

Nederland saw an increase in July sales tax revenue with a net payment of $372,077 for July sales compared to $309,891 the year before, for an added $20.06 percent.

2013 Payments to date reflect a slight decrease, 0.29 percent, from the same period last year, at $3,344,073 compared to $3,353,807.

City Manager Chris Duque said the addition of new businesses, most notably Howell’s Furniture, figured into the increase in sales tax revenue generated for the city.

Port Neches also experienced a loss in July sales tax dollars. The city’s July 2013 net payment was $85,741 compared to $93,804 for a loss of 8.59 percent.

Payments to date made in 2013 reflect an increase of 1.19 percent above the 2012 payment of $930,679.

“We are satisfied our economy is stable,” Amy Guidroz, Port Neches finance director , said. “We are not seeing a lot of growth, and are not budgeting for that. We are a little different (from most cities) in that we don’t have a huge retail base.”

Orange County saw a 12.75 percent loss for the July 2013 payment of $323,520 compared to $370,822 the year prior.

Orange County 2013 payments to date equal $3,425,556 compared to $2,958,672 in 2012.

E-mail: skoonce@panews.com

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