Any hopes that Houston’s sales tax decline was about to ease were dashed yesterday when the Texas Comptroller reported that the City’s sales tax receipts for December were down by 7.5% from last December. In the last ten years, Houston has only seen a 7% or greater decline in monthly sales tax nine times. Three of those have been in 2016.
The report is based on October sales and completes the first six months of the City’s fiscal year. Year-to-date collections are now off by 4.4%, which is the worst start for sales tax collections since 2013. Year-over-year collections have now declined for 16 consecutive months.
The last time the City saw a year-over-year increase was August, 2015. The trend line on collections has been in decline since October, 2012. This the longest period of depressed sales tax collection for as far back as I can find records.
It is time for the City to stop whistling past the graveyard and realize that it is in both cyclical and structural deficit and take action accordingly. It is certainly no time to be committing 50% of our property taxes for the next 30 years to pension contributions.