Odessa sales tax revenue from the state in February showed a year-over-year increase for the first time since June 2015, per figures released Wednesday by the Texas Comptroller of Public Accounts.
February sales revenue increased by 1.84 percent from the same period of last year to more than $4.08 million as the local economy and the Permian Basin region recover from an oil bust.
A fifth of the monthly sales tax check goes to the Odessa Development Corporation, or about $816,411. The latest payment left the City of Odessa with more than $600,000 in sales tax revenue above what city administrators projected for this point in the fiscal year that began Oct. 1, Assistant City Manager Konrad Hildebrandt said.
“The hope is that we’ve turned the corner and that we start moving into the positive like we have before,” Hildebrandt said. “We are pretty excited as a city.”
The rate of decline steadily narrowed in recent months, reaching just 1.67 percent in January compared to the same month of 2016. In December, sales tax dropped 7.8 percent compared to the same month of 2015. But city officials weathered about a 5 percent shortfall in sales tax revenue from the budgeted amount without being forced to dip into reserves, freeze positions or cut major projects.
“It may well be that we’ve reached the bottom in terms of economic activity in Odessa as well,” said Amarillo economist Karr Ingham, who studies the Odessa economy, in an interview last month. “And that’s a welcome outcome, it’s been about time.”
The Odessa City Council budgeted about $3.3 million less in sales taxes, about $30.6 million, for the fiscal year that began Oct. 1.
The February sales tax check to the Ector County Hospital District increased 6.37 percent from the same month of 2016 to more than $3.16 million.
The City of Midland saw a decline in sales tax revenue in February of 17.42 percent to more than $5.48 million compared to the same period of 2016. Last month, the Tall City’s sales tax check showed a decline of only 0.63 percent compared to January 2016.
Hildebrandt said Odessa’s first increase in sales tax revenue in more than a year was “great news” but stopped short of saying yet that he expects sales tax revenue will keep increasing.
“Even though in this area we anticipate booms and busts, we are kind of in a little uncharted area with as long as we were in the bust cycle,” Hildebrandt said. “We are cautiously optimistic that we will continue to improve, and things all throughout the area will continue to get better.”
Statewide, sales tax figures distributed by the comptroller’s office to cities, counties, transit systems and special purpose taxing districts dropped by about 1 percent in February compared to the same month last year. The allocations are based on December sales.