Some East Texas towns enjoying positive sales tax figures after going wet
Published 8:21 pm Wednesday, June 12, 2013
As more East Texas communities go wet, some are enjoying positive sales tax numbers, while others have seen a decline, according to the Texas Comptroller website.
In Coffee City, which once was one of the few places in East Texas where residents could purchase alcohol, cuts have been made — from personnel to police vehicles — because residents now have more options for purchasing beer and wine. But in Tyler, which began selling alcohol in December, additional sales tax revenue is coming in.
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Tyler is up about 8.6 percent this June compared to last June, and year to date, it is up about 4.3 percent for sales tax revenue, the comptroller website shows.
Tyler Chief Financial Officer Keidrick Trimble said it is estimated that about $46,000 of Tyler’s May sales tax allocation is related to beer and wine. For April, he said that estimate was about $31,000.
He said detailed data from the May payment also showed that the service sector was up as well as utilities and construction.
“It looks like we’re seeing some change in the economy…” Trimble said. “The retail sector is up, and beer and wine would be in that sector. The wholesale sector is up as well. … We’re kind of seeing growth in all areas.”
He said it’s unknown whether that growth will continue, but the city will look at trends as it goes through the budget process.
Tyler isn’t the only city with a positive sales tax trend so far this year.
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For Lindale, which does not allow beer and wine sales, 2013 sales tax payments to date are up 6.35 percent compared to the same period last year; Rusk, which began beer and wine sales in 2009, is up 12 percent; and Jacksonville, which also has approved beer and wine sales in recent years, is up 8.71 percent, although there was a slight decline in this month’s allocation compared to June 2012, according to the comptroller website.
Troup’s June allocation, one of its largest in decades, was $41,814.78 — up 37.57 percent from last year’s comparable payment of $30,394.91, the comptroller website shows. The city’s 2013 payments to date — $198,053.65 — are up 12.19 percent from the same period in 2012.
Troup City Administrator Gene Cottle said he anticipated a smaller June payment and is not certain why this month’s allocation was as much as it was. He pointed out that the allocation was higher than February’s, which represented sales from December.
“I just got the numbers,” he said Wednesday morning. “I was in a little bit of a shock myself.”
R.J. DeSilva, spokesman for comptroller’s office, said Troup’s June allocation increase was because of remittances from one taxpayer.
As far as future sales tax dollars, it is unknown how alcohol sales in Whitehouse will impact Troup, which approved alcohol sales in 2011, Cottle said.
Whitehouse voters last month gave the go-ahead for stores there to sell beer and wine. That came about six months after the sale of beer and wine was legalized in the city limits of Tyler and inside JP Precinct 2, which includes unincorporated portions of the county west and south of Tyler, as well as Flint and Bullard.
Still, Cottle said Troup offers distilled spirits, which Whitehouse will not have, and in relation to Tyler, Troup knows where it stands and doesn’t have to compete.
In fact, as he spoke on the phone late Wednesday morning, he noted the cars he saw at Brookshire’s in Troup.
There’s a “great many cars this time of the day. That’s something we didn’t see before,” Cottle said.
He said when he goes in restaurants, he also sees people he doesn’t recognize.
“That means people are coming here for some reason. It may be the food. It may be something else,” he said.
Jacksonville Finance Director Freddy Thomas attributed his city’s upward trend in part to its February allocation, which represented December sales.
He said it’s difficult to pinpoint how much alcohol sales have helped the city, if at all, now that many nearby communities are wet.
However, the fact that Jacksonville allows alcohol sales prevents some residents from going elsewhere to buy beer and wine, Thomas said.
He said Jacksonville generally is doing OK this year, mainly because of February revenue. Additionally, he said Jacksonville has a distribution center project in the works, which is expected to bring as many as 100 jobs to the city within its first year.
“In general, we’re trying hard to keep what we’ve got,” Thomas said.
But not all cities are seeing a positive trend. Coffee City’s June sales tax allocation is nearly 50 percent down from June 2012, and the town is more than 15 percent down year to date compared to last year, according to the comptroller website. In Winona, which was the first wet jurisdiction inside the Smith County line since 1930, sales tax revenue is down 34.59 percent year to date compared to last year. Both communities allow the sale of liquor as well as beer and wine.
Coffee City Mayor Ray Wakeman said the community has always survived on sales tax revenue since it doesn’t have city property tax. The plan, he said, is to “keep it that way as long as possible.”
Wakeman said Tyler going wet has had more of an impact than other communities.
“We’ve had to make a lot of cuts in spending,” he said. “The previous council and mayor didn’t make provisions for that happening (in Tyler), so it’s been up to us to look at things, cut what we need to to survive.”
That entails cutting some employees, including a municipal judge and cutting street lights, Wakeman said.
He said the city was paying for 136 lights, and that number is now down to 36. He said the city also made adjustments in regard to insurance coverage and sold a police car.
“Staff has been very good at watching how things are spent,” he said. “As long as everything continues where it is, we’ll be fine for a while.”
Staff Writer Adam Russell contributed to this report.