Aug 17, 2023 - Business

Sales tax revenues dropping in North Texas

Data: BLS; Chart: Axios Visuals
Data: BLS; Chart: Axios Visuals

Sales tax revenues are dropping in many North Texas cities after huge jumps largely due to the rising cost of goods.

Why it matters: Cities are in the midst of adopting budgets for the next fiscal year based on projected property tax and sales tax revenues.

Details: Dallas increased its sales tax revenue by $15.5 million from October 2022 through February.

  • But, in three of the four months since February, the city had lower collections than in the same period last year, per a city memo.

By the numbers: Sales tax collections were down nearly 1.5% in June in Dallas compared to the same month last year, according to the latest Texas comptroller figures.

  • Frisco's year-over-year sales tax collections dropped nearly 8% in June. Irving had a 2% drop.
  • Arlington had one of the sharpest declines — more than 20%.
  • Meanwhile: McKinney had a nearly 5% jump in sales tax revenues in June.

Yes, but: Total sales tax collections from January to June are still up year over year in most North Texas cities.

  • Fort Worth, for example, has collected 8.6% more in sales taxes in 2023.
  • Arlington's sales tax collections are an exception, down nearly 3.5% year over year.

What's happening: Inflation has been slowing since last July, but prices are still high.

  • The Consumer Price Index rose 4% in the 12 months through July in Dallas-Fort Worth, down from last July's high increase of 9.3%.
  • Local price gains remain higher than the national CPI rise of 3.2% in the 12 months through July.

What's next: Dallas' contract economist, Dearmon Analytics, predicts sales tax collections will continue to slow over the next several months.


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