El Campo’s economy pulled out of new year doldrums just in time for pandemic safety measures to pull the plug.
The city’s $411,144 sales tax rebate check received this week was up 5.66 percent from May 2019, only the second increase this calendar year. The rebate reflects purchases made in March, before Texas Governor Greg Abbott issued stay-at-home orders closing all businesses, factories and offices not considered essential.
Next month’s check will reflect sales tax collected in April, so the slight improvement won’t last, City Manager Courtney Sladek said, adding shortfalls may be experienced in July as well. That rebate will reflect purchases made this month, right as Texas is slowly getting back to work at 25 percent capacity.
In response, staff is requesting the El Campo City Council approve cutting in $295,770 from the current budget during Monday night’s session.
“We have decreased several expenditures in response to the anticipated loss, including gas and oil line items, training and travel, as well as capital projects,” she said. Other items cut include “a decrease of 5 percent in sales tax (anticipated revenue) or $227,770. Additionally, a few other items will be adjusted to account for revenue shortfalls, such as interest income, aquatic center fees and the contribution from El Campo ISD for our school resource officers.”
For the calendar year, city sales tax collections are down 2.73 percent and expected to drop sharply next month, when the full effects of the COVID-19 pandemic’s fallout effects will be seen.
Local officials are uniting in urging the public to support local businesses as they reopen and to continue support of those essential businesses that have remained in operation throughout.
State Comptroller Glenn Hegar’s office distributed $824 million statewide this week, 5 percent less than in May 2019. The agency expects next month’s allocations, based on April sales, will show steeper declines compared to a year ago.
The El Campo economy has shown losses three of the last four months.
The city ended the 2019 calendar year up 10.11 percent on sales tax rebates. In 2018, El Campo sales tax rebates were up about 9 percent. The last year that ended with a sales tax loss was 2016, when collections were down 3.41 percent.
Other Wharton County Reports
Wharton County’s sales tax rebate showed a strong 8.55 percent gain in May, but is down 1.31 percent for the year. Now it waits to see how bad the pandemic fallout will be on its budget and reserves.
The county finished 2019 up just .61 percent more than in 2018, the second year of an almost stagnant economy. For 2018, county sales taxes were up .43 percent.
The city of Wharton also posted a significant gain on its May rebate, 11.1 percent from May 2019. However, like the county, the city’s rebates are down 1.32 percent for the calendar year.
In 2018, the city’s rebates were up 6.38 percent. In 2017, Wharton dropped 4.8 percent.
East Bernard’s check rose 13.5 percent this month. So far this year, East Bernard’s sales tax rebates are up 15.58 percent for the calendar year.
The city recorded a 13.55 percent jump in 2019. That city’s rebates were up 20.9 percent in 2018.