The city of Katy will collect $832,295 in sales tax revenue in June, a 16.77% decrease from the $999,975 the city collected in June 2019.
Meanwhile, the city of Fulshear will collect $279,379 in sales tax revenue in June, a 29.8% increase compared to what the city collected in June 2019.
The sales tax revenue the cities will collect in June is based on sales that occurred April. Social distancing guidelines and business restrictions were put in place in mid-March and in full effect during the month of April. The staggered opening of Texas businesses began May 1.
The state of Texas as a whole generated sales tax revenue totaling $443.6 million in April, which represents more than a 11% drop compared to last year.
Cities' reactions
Although the city of Katy’s sale tax revenue is down almost 17% year over year, Katy Finance Director Andrew Vasquez said he expected the drop to be bigger.“This was a surprise for us,” he said. “It’s a good surprise. ... The number represents April sales, and everything was closed: malls, restaurants, bars and entertainment. Companies were laying off people.”
Vasquez said that there was likely a shift in consumer spending where residents spent their money on essential items at grocery stores and turned to online shopping. For example, the shelves at Katy grocers were nearly empty when he and his wife shopped. he said.
For the city of Fulshear, Chief Financial Officer Wes Vela said its year-over-year increase of nearly 30% indicates residents spent their money in the community rather than at their workplace.
According to the 2019 Fulshear Livable Center Study, about 91.5% of Fulshear residents are employed outside city limits.
However, Vela was cautious of future sales tax collections.
“It remains to be seen how the pending job loss to the oil and gas industry will affect our community and the subsequent continued spending in the months ahead,” he said.
