City officials remained conservative in their fiscal year 2016-17 budget projections even though The Woodlands, Shenandoah and Oak Ridge North all experienced a growth in sales tax since FY 2012-13.[/caption]

Sales tax revenue over the past year remained flat or declined in The Woodlands, Shenandoah and Oak Ridge North, prompting city officials to remain conservative in their fiscal year 2016-17 budget projections.

Monique Sharp, assistant general manager for finance and administration for The Woodlands, said the township collected 3.1 percent less sales tax over the past year than what was projected in the FY 2015-16 budget.

Sharp said this past year The Woodlands saw the construction of businesses in the Hughes Landing area, two new hotels and office buildings. The result of no sales tax collections from these new projects and the decrease in real estate leasing in the area contributed to the flat sales tax projection for the FY 2016-17 budget approved in September.

“Even though we still have a conservative budget for 2017, we’re still in a good position to see an increase,” Sharp said. “Our top four categories in The Woodlands are retail, accommodation, informational and food services, and manufacturing. We have positive gains in all categories.”

Sales tax in Shenandoah for FY 2016-17, which is budgeted at $5.2 million, has decreased from FY 2015-16 receipts based on changes to the sales tax base. City Administrator Greg Smith said although sales tax did not increase, the city can expect an increase in sales tax revenue in the future.

“The area is going through a lot of changes,” Smith said. “One reason is that retailers have closed and buildings are being remodeled. Another reason is the oil and gas industry [downturn] that has happened over the last year. However, the [sales tax revenue] is going to increase, and we feel comfortable with what we have budgeted.”

Smith said an increase in sales tax will come as new businesses open. However, the city will still remain conservative with projections, which can be seen in the budget that was approved in August.

The city of Oak Ridge North also saw flat sales tax collections over the past year due to the oil and gas industry, but is expecting the opening of the upcoming Crowne Plaza Hotel to raise sales tax revenue, City Manager Vicky Rudy said. The city projects a 6 percent increase in sales tax for FY 2016-17.

“Sales tax is always a moving target,” Rudy said. “However, after construction, the hotel will contribute to our sales tax revenue from restaurant and retail-type sales from the hotel. Oak Ridge North’s sales tax base has only a small impact from oil and gas sales tax, but a larger one from restaurants and retail.”

Rudy said although she expects the hotel to offset the oil and gas industry downturn, city officials are still concerned that a decline in the oil and gas sector will slow economic growth in the region.