Greg Hutson

Some small cities in the Longview area and throughout Texas might be seeing gains in sales tax disbursements because the coronavirus is prompting residents to shop closer to home.

That’s the opinion of Gilmer City Manager Greg Hutson, whose city has seen double-digit increases in sales tax refunds from the state for at least two months in a row.  

Gilmer will receive $196,199 in disbursements from the state this month, up 34.13% from $146,271 a year ago. The state returned $181,489 in June, up 21.52% from $149,341 a year earlier.

Texas Comptroller Glenn Hegar reported Wednesday that he will send cities, counties, transit systems and special purpose taxing districts $744.2 million in local sales tax allocations in July, 2.6% lower than a year ago.

Sales tax disbursements in July are based on sales made in May. April and May are two months when stay-at-home restrictions were implemented to combat the COVID-19 pandemic. 

“It appears (the increases are) due to the stay-at-home (order) because of that pandemic,” Hutson said.

He said Gilmer also has seen its sales tax disbursements increase 135% from the start of the fiscal year in October.

Hutson said he analyzed data from 1,160 rows of cities in Texas that show 892 municipalities will see percentage increases when checks arrive from Hegar this month. They include 132.48% for Celina in Collin County, 29% for Garrison in Nacogdoches County, 27.7% for Troup in Smith and Cherokee counties and 27.1% in Avinger in Cass County.

“A lot of these smaller cities are seeing double-digit increases,” Hutson said. “When I look at the other cities that are comparable in size, it is the same thing.”

Closer to home, other small cities also saw gains this month. They include 46.3% for Hallsville, 32.2% for White Oak, 30.8% for Ore City and 27% for Henderson.

White Oak Assistant City Manager Melba Hart was at a loss to explain the percentage increase in her city, where disbursements will grow this month to $105,661 from $79,895 a year ago. It follows June, where disbursements dropped 18.46% to $86,464 from $106,049 in 2019.

“I am a little bit surprised, pleasantly surprised,” Hart said. She said May was “well into” the pandemic.

“We’re still down overall,” she said. “We can be cautiously optimistic of what the future holds. It makes it really hard to budget.”

Other area cities, which have seen disbursements drop for two months or more in a row, might take a cautious approach.

Longview will see its disbursements this month decline 3.76% (from $2.67 million to $2.57 million). The city had a drop of 23.2% (from 2.84 million to $2.18 million) in June.

“We were down, but we were not down as far as the previous two months,” city spokesman Shawn Hara said. “Looking around the state, there was a significant fluctuation from city to city.”

Echoing Hart, Hara said city officials “are looking at things very cautiously from a budgetary perspective.”

Some of the biggest percentage losses are being felt in Kilgore, where disbursements this month fell 45% to $454,206 from $826,518 a year ago. Kilgore declined by a similar percentage — 44.2% — in June with disbursements down to $447,349 from $801,240 a year earlier.

Kilgore City Manager Josh Selleck and Mayor Ronnie Spradlin were unavailable for comment Wednesday.

Gregg County will see its disbursements this month drop by 11.8% to $1.16 million from $1.32 million a year ago for transactions that took place in unincorporated areas. The county fared better than in June, when Hegar returned $1.01 million, down 26% from $1.37 million the previous year.