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Tuesday, February 22, 2000
Retail sales down for Texas but up nationwide
February sales tax rebates off slightly in area with Bayside down the most
By Tara Copp
Caller-Times
Texas' aggressive retail sales may be peaking at a healthy 6 percent in 2000, an enviable clip nationally but a slowdown for the state.
"The economy is still very strong, consumer confidence is still very strong, but the Comptroller's staff is predicting slightly slower growth this year than last year," said Sheila Clancy, a spokeswoman for Texas Comptroller Carole Keeton Rylander.
Economist Ray Perryman, CEO of Texas-based economic consulting, research and publishing firm The Perryman Group, said Texas' economy will continue to outpace the rest of the country but won't outpace itself.
"I do think you won't see the same rates of growth in the next two or three years. The growth rate will slow down. We won't see huge double-digit increases, but we'll see steady increases," he said. "If you want to call that a peak, I guess you can."
Texas' city sales tax rebates rose only 0.01 percent in February 2000 compared with February 1999; cities around the state and throughout the Coastal Bend saw deep dips in February sales tax rebates. But more was at play than slowing growth, Clancy said.
"What happened was that there was a big push in December to get everybody huge rebates - we basically cleaned out the pipeline and there was very little carryover," she said. "Every month there is a count-off date where we stop counting the money. Usually on the cutoff date there's still some money that doesn't get allocated that month, so it catches up later. Well, there was very little of that money waiting to catch up. Basically, cities have already gotten their money."
Corpus Christi's sales tax rebates compared to February 1999 rose only 0.99 percent, according to the Comptroller's office. Among Coastal Bend cities, Bayside's rebates dropped the most, down 47.33 percent to $533 from $1,012 in 1999.
Bishop saw the biggest increase, up 22.32 percent to $12,401 from $10,138 in February 1999.
December 1999's rebates brought the total Corpus Christi sales tax rebates in 1999 to $3.5 billion, a new one-year record for local sales tax revenue and an increase of 7.1 percent compared to sales tax allocations in 1998.
Perryman said the state should see a 5 percent to 6 percent increase in 2000. To date, sales tax rebates to cities and counties are up 6.6 percent compared with the first two months of 1999, the Comptroller's office reported.
This month's payments to cities and counties include sales taxes collected by monthly filers in December, and reported to the comptroller in January, plus quarterly returns for sales in October, November and December, and returns from annual filers for the entire year of 1999.
The effect of Internet sales, which aren't taxed, on the state's sales tax revenue is just now starting to be measured, Perryman said. So far, online commerce isn't taking a substantial chunk out of the state's revenue, he said.
The Internet sales "are probably legal to tax, but probably very difficult to enforce," Perryman said. "We don't yet see a dip as a result" of Internet sales, "but it's going to be an ongoing challenge to capture that commerce. I think the volume of sales now offsets Internet sales, but it's growing very rapidly. Some folks we do forecasts for want us to start monitoring it."
On Retailing is published every other Tuesday in the Caller-Times business section. The column includes news of new, relocated and expanded businesses in the Coastal Bend, plus retailing trends and profiles. Ideas may be submitted to: On Retailing, Corpus Christi Caller-Times, P.O. Box 9136, Corpus Christi, Texas 78469; e-mail Tara Copp at coppt@caller.com; fax items to (361) 886-3732; or call (361) 886-4316.
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