Shoppers Welcome

Daisy Pesina, a certified pharmacy tech at Professional Pharmacy, arranges merchandise along a wall of grid for customers. Local shopping will be needed to make up for sales tax revenue lost due to the coronavirus pandemic, officials say.

The state is sending out a warning, the economy hasn’t been in this bad of shape since the plunge experienced in January 2010.

Total sales tax revenue collected statewide during April fell 9.3 percent in comparison to April 2019, Comptroller Glenn Hegar reported Friday. Worse, he says it’s a sign of things to come.

Cities and counties will see their portion of the $2.58 billion in sales tax generated statewide next month. This month’s sales tax check actually reflects retail dollars spent in March.

“The steepest declines in tax remittances were from businesses most quickly and dramatically affected by social distancing: restaurants ... and fitness centers, as well as department stores and boutique retail shops,” Hegar said. “However, those losses were, to a degree, offset by increases from big-box retailers, grocery stores and online vendors. Remittances from oil- and gas-related sectors also fell significantly.”

Sales tax is the largest source of revenue for the city, a significant source for Wharton County and 57 percent of the state income.

It serves as an indicator of economic growth or slowdowns, albeit a lagging one with two months between the purchases and distributions, and often longer for trends to be established.

“The city has adequate reserves to protect us in the event of a crisis such as this; however we do not anticipate a sharp incline in revenues within the year,” City Manager Courtney Sladek said. “As such, we are presenting the (budget) amendment (on Monday) and will prepare a budget that has limited or no capital.”

Monday’s proposed budget amendment was put on hold with council deciding to monitor COVID effects.

Sladek said she remains hopeful, however, “We’re still monitoring revenues month-to-month, and perhaps the Governor’s plan to reopen Texas will not result in catastrophic losses for our revenues and reserves.”

Budgets are a major concern as sales tax rebates are already in decline.

“I believe we will see some stark differences in the sales tax revenue for the next few months. This crisis we are currently in has directly affected a large percentage of our businesses ... The important thing to focus on at this time is please continue supporting the local businesses who have been able to remain open by providing curb-side pickup, delivery and online purchasing,” City Development Corporation of El Campo Executive Director Carolyn Gibson said.

“The most critical thing citizens of El Campo can do at this time is stay safe and stay healthy. Follow the directions of our local leaders as far as social distancing and personal safety. Their only concern is you. It is in everyone’s best interest to stay healthy and stop the community spread of the virus,” she added.

The effects of the March economic slowdown and falling oil prices were more evident in other sources of revenue in April 2020. Texas collected the following revenue from other major taxes:

• Motor vehicle sales and rental taxes were down 45 percent from April 2019, the largest monthly drop on record in data going back to 1983;

• Motor fuel taxes down 12 percent from April 2019, the steepest drop since 1991;

• Natural gas production tax down 48 percent from April 2019;

• Oil production tax down 45 percent from April 2019;

• Hotel occupancy tax down 63 percent from April 2019, the deepest drop in data going back to 1990;

And, despite the prevailing myths, alcoholic beverage taxes — $57 million, down 55 percent from April 2019, largely due to the closure of bars. The portion related to package sales, however, were up. Beer by 16 percent from April 2019 and wine 9 percent from April 2019.

Gibson said residents can help not only by shopping, but also by simply filling out the 2020 Census forms. “Our census reports will determine the funding for our city and county from both state and federal sources,” she said. “This includes, but is not limited to, funding for education, health care, housing, infrastructure, transportation and business assistance.”

Forms can be completed online at Census.gov.

The CDC’s business is to encourage and assist economic growth in El Campo. Multiple resources are available at https://elcampoeco.org or by calling 979-543-6727.

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