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Sales Tax Gameday - September 2020

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ZacCast

Temperatures drop, and so does sales tax. Patrick and Chad continue the new monthly feature of totally on-the-fly exploratory analysis of city sales tax collections. Come along with us as we dig into September's allocations for the first time to see who's up, who's down, and what can we learn from today's data drop.

02:48 - DFW
06:54 - Houston
10:45 - San Antonio
13:26 - McAllen area
13:35 - Corpus Christi area
15:13 - Austin Area
18:06 - Bryan/College Station
20:52 - Waco
22:18 - Abilene
23:16 - San Angelo
23:25 - Midland/Odessa
25:52 - Lubbock
26:40 - Amarillo
27:35 - El Paso
28:11 - Brownsville
29:10 - East Texas
30:04 - Sherman/Denison
31:00 - Removal of internet sales tax
33:30 - Wrap upInternet Tax Freedom Act (of 2016)

Transcript

0:13 Chad
Hey, everyone. Welcome back. It is sales tax game day. This is Chad Janicek here with Patrick Lawler on what has turned out to be kind of a chilly, uh, late summer afternoon here in the Dallas-Fort Worth metroplex. Also, unfortunately chilly for sales tax across the state. So Patrick, why don't we dive right in? Give us a summary.
0:35 Patrick
I mean, across the state, uh, for cities, I mean, we're down 4.8%. Uh, obviously this is a little bit of a cold, wet blanket after we've had some positivity over the last couple of months. Um, but a little bit more of the same story. As we go through these regions, we'll be able to look and see who's down, who's up, and, and what we're seeing. But yeah, overall, statewide, cities were down 4.8%. So, um, as, as you said, matches the weather outside for sure.
1:02 Chad
Okay. So we, since our last recording, have built kind of a, a different tool for us to use. Uh, so we're gonna kinda look separately. Last month we were just looking off the same screen. Uh, the goal here is that eventually this will get presentable enough where we can actually do these live. Uh, but for now, uh, we might have to kind of... Just bear with us a little bit 'cause we may have to pause and come back and, and hopefully we'll be able to keep train of thought as we kinda go through this. Uh, but yeah, just looking at sort of high level, uh, we're looking at CSAs a- across the state. The DFW area down 3%. Houston, Woodlands down 7%. San Antonio down 7%. Uh, let's see. Midland-Odessa, again, struggling 35 and a half percent. Corpus Christi, McAllen, all... I mean, basically outside of El Paso and Amarillo and the Kerrville-Fredericksburg area, pretty much every large major, uh, statistical area saw declines this month.
1:59 Patrick
Yeah. Speaking of Kerrville-Fredericksburg area, um, on the top 10 list of Airbnb places to stay on vacation during the summer of 2020. Just throw that out there. Uh, came out yesterday. I just thought that was an interesting detail. But yeah, I mean, overall, you know, pretty much across the state, all your major reasons, regions saw declines. Uh, DFW, you know, predictably was a little bit better than some of the other regions. I mean, obviously better than Houston, San Antonio. Um, you know, they, they did a little bit better than those areas. But, you know, we did, I think, see some declines that were a little bit more significant than, uh, what we expected. So as we dig into the regions, I'm gonna kind of start us off and, and dig into the Dallas-Fort Worth area, kinda get a better idea of what we're looking at and, and how, you know, those different cities perform. So, um, talk about the bigs. You know, Dallas-Fort Worth, Arlington, Plano, and Frisco. So Dallas performed at four... They were down 4.49%. Um, you know, Fort Worth was only down 1.83%, which we've seen that trend, uh, for the past couple of months where Fort Worth has just overall performed significantly better than Dallas. Um, but Arlington saw a significant drop, 14.81%, uh, was the drop that Arlington saw. Uh, it'd be interesting to see their data and see exactly why they're dropping. Obviously, you know, they're a big sports hub here in DFW, so a lot of that hasn't been occurring. But we did just get the announcement that Arlington's going to host the World Series. So, uh, pretty exciting for the Dallas-Fort Worth area. Uh, Plano-
3:31 Chad
Hold on
3:31 Patrick
... is... Yeah. Sorry. Yep.
3:33 Chad
What, the Little League World Series? The College... What, what are they, what are they hosting?
3:37 Patrick
No. No, the Major League World Series. You didn't hear the announcement yesterday?
3:38 Chad
Oh, they're not gonna have it at the host cities? Like the actual-
3:41 Patrick
They're not gonna have it at the-
3:42 Chad
Oh, wow.
3:42 Patrick
Yeah. So they're, they're bubbling the playoffs. Uh, it, they're bubbling the playoffs in California and in Texas, and they've officially announced that, uh, Ar- Arlington, uh, will host the World Series at the new Globe Life.
3:56 Chad
Okay.
3:56 Patrick
Uh, also-
3:57 Chad
I've had, I've had such a hard time following baseball 'cause the Rangers just have not been very good this year, so.
4:02 Patrick
So I'm an Astros fan, right? So, um, I'm knocking on my trash can. Um- ... I've been following them, you know, all the time. So doesn't really matter to me, uh, how bad they've been, 'cause, you know, I'm a, I'm a fan in good and bad, Chad. I used to go to 30 games a year when we were terrible.
4:19 Chad
So one quick note as I dive in here into Arlington's. Last year, uh, September 2019, they had a 23% increase. So this year's drop of about 15%, it does still put them ahead of 29... 2018, uh, but maybe there was some kind of audit adjustment. Let me just kind of go back here. Uh, so they had a really large future period collection last year, um, 830,000, which really kicked, kicked those numbers up last year. So it may not have been, it may not have been as big of a decline as it looks like if you were to line all the payments up in their actual, you know, chronological timeline.
4:55 Patrick
That makes sense. I, I, I think, you know, some of the things that are surprising in this data though when I look at it is there, there are two that pop out at me, Frisco and Allen. Um, just because w- we've seen through the COVID trend that the, the suburbs and even kind of the near burbs have performed better than the urban centers. Uh, and, and we've seen that in places like, like Frisco and Allen. Uh, but in, in the September data, we saw Frisco had an 8.85% loss. Now, they did have some pretty significant gains in 2019, September 2019. Um, and so it's, it's, you know, it's not like taking them all the way back to a 2018 number. Same thing with Allen. Allen saw a 4.99% loss, um, with the September data we just received. And, uh, you know, I think that kind of popped out as a little bit of a surprise to me. But just to wrap up this region and talk about it a little bit, the big... You know, I don't want to say like... Well, I mean it is what it is. I mean, the big loser in the region, big shopping hub, you know, obviously they've got major retailers in the area, uh, is the city of The Colony right there on 121. They saw a decline of 35.03%. And when you dig into their data and look at where they wereUh, last year, September of two thousand nineteen, you know, they only saw a nine point two nine percent growth. But in twenty eighteen, they saw a big fifty-one point nine two percent growth because of an audit. So I mean, it, it really, if you baseline off that twenty nineteen year, they still saw a significant decline and probably the worst decline that, that we've seen in this region.
6:28 Chad
Yeah. They almost had a million dollars in future period payments last year too.
6:32 Patrick
Yeah.
6:33 Chad
Yeah. So so-sometimes just looking at the net payment can kind of skew things because if there are irregular payments, then you're not getting the full picture just looking at the public data. That's why having the confidential data is so valuable. You can see exactly how those things shook out, and that really helps you project, uh, you know, your future, future revenue.
6:53 Patrick
Absolutely. So, so moving on to another region, what region do we want to hit next?
6:58 Chad
Let's go Houston.
6:59 Patrick
Oh, Houston Woodlands.
7:01 Chad
South Texas.
7:01 Patrick
The region as a whole-- South Texas if you talk to Patrick, yeah. So the region as a whole is down seven point one seven percent in that Houston area, so let's dig in and see what we got.
7:12 Chad
A big chunk of that's Houston. Four million dollar loss, down seven point three percent.
7:17 Patrick
Wow! That's a big, big tumble. Net payment of fifty-two million. Their twelve-month average net payment is fifty-six million. Um-
7:28 Chad
Wow. But just looking at that, so let's see. Uh, pulled it down, down to two percent decline in their twelve-month collections-
7:36 Patrick
Ooh
7:36 Chad
... compared to, uh, the last year.
7:39 Patrick
And that's the rolling twelve-month, right?
7:41 Chad
Yeah.
7:42 Patrick
Yeah. So I mean, that's, that's huge that it pulls it down that much in the rolling twelve. But yeah, and, and last year they really only had about, uh, you know, two point seven percent gain in their September twenty nineteen numbers. So that's a substantial loss for a big city, especially the city the size of Houston, which, uh, is important to note that's also a substantial loss for a lot of special districts because Houston has, uh, revenue sharing agreements with a lot of the, uh, municipal utility districts and special districts that surround it that sit in its ETJ or inside of Harris County. So, um, that number is all made up within the Houston number. Uh, so that's, that's important to note that there's gonna be a lot of different entities that get impacted by that, that loss, not just the city of Houston. Um-
8:25 Chad
I'll tell you one thing that stands out to me in the Houston area, there's some really big numbers. Taking out League City, which is up almost twenty-five percent, Galveston's down almost seventeen, Texas City down twenty-one and a half. Yeah, Stafford up twenty-two percent. There's just some really big numbers, uh, on both sides of the ledger.
8:46 Patrick
Yeah. Which Stafford is, is one of those cities in the state, like Hudson Oaks, uh, where Chad and I came from, that does not have a property tax, and so they are very dependent on sales tax. It's, um, you know, close to my heart there, so good to see them still positive through this. Uh, but yeah, but I mean, some suburbs that are surprising to me. I mean, Tomball, uh, down two point two percent. Rosenberg down two, two point four. Webster, which is a, a big suburb with a bunch of, uh, commercial retail on the interstate, uh, down seven percent. And Katy, obviously impacted by mall closures and slowdown in malls business, uh, down eleven percent. Katy's got a big Mills Mall. Um, and so if anybody's ever been there, kinda like Grapevine's got. So, um, you know, it's just this is one of those months where we're seeing a lot of declines in areas that we haven't s- we really haven't been able to see yet. Uh, even like in the Shenandoah Woodlands area, I mean, you're, you're seeing a decline of ten point five three percent in Shenandoah. Just, I mean, wow. It's big. Waller, which, you know, a big generator in Waller is that Buc-ee's they've got there on two ninety. Uh, you know, they're down twenty-seven point seven percent. You know, Wharton, thirty percent down. Hempstead, sev- I mean, these are, these are big numbers for little cities. I mean, even when you get into the smaller numbers, I mean, those are, those are some pretty significant numbers. But Galveston, Texas City, I'm surprised. You know, I thought you'd see more stay-and-play vacationing occurring in Galveston, uh, within July. But, uh, you know, I think the uptick in cases in Harris County probably had some impact on that is, is my guess, down sixteen percent in Galveston.
10:26 Chad
Didn't we see growth in Galveston last month?
10:29 Patrick
We did. We actually... Yeah, we talked about it, and we talked about how surprised we were to see that growth in Galveston last month. So yeah. I mean, it's, it's wild for sure, uh, to see it. Yeah, we s- we saw a slight growth, um, in the August number. It was two point five nine percent. So next region, man, San Antonio, one of the, one of the bigger losers as well, six point nine five percent in that San Antonio region. Dropping in there, getting a better understanding of what we're looking at. San Antonio's down seven point four percent. New Braunfels is down a little over six.
11:04 Chad
Gotta check out Shirts up at seventy-four percent.
11:06 Patrick
Yeah. Go, go pop into Shirts as I read the rest of these off. Seventy-four percent up. Um, you know, Live Oak, which is, which is also a big destination for, for shopping, up nine percent. Uh, Seguin, uh, manufacturing hub, is up... Oh, let me get that. Lost it there. It's up four point six five percent.
11:26 Chad
Seguin's down four point six five.
11:28 Patrick
Yeah, sorry. Down. Um-
11:30 Chad
So Shirts had a massive audit correction last year, down three hundred and sixty thousand, then they had an audit increase of a hundred. So that's a four hundred and sixty thousand dollar swing-
11:39 Patrick
Yeah
11:39 Chad
... which accounts for a large por-portion of that, that, uh, percent change.
11:44 Patrick
So big surprise in this region. Uh, dig into those Hondo numbers. Hondo's down seventy percent. Had to be something going on there. And then Parisall down twenty-three point eight five percent.
11:58 Chad
I have no idea. Hondo went from, let's see, five twenty-three in total collections last year to one fifty-two this year.
12:07 Patrick
Yeah.
12:08 Chad
But I-- there, there must have been some kind of anomaly or let's
12:12 Patrick
There had to be. So there are 18 collections for September
12:15 Chad
And August were both about 500, but everything else is around mid 100. So something happened last year around this time that caused a huge spike in their revenue.
12:25 Patrick
And Hondo-
12:25 Chad
And then it looked like it lasted-- it looks like it lasted Au-August, September, October, and then it went away.
12:31 Patrick
Yeah.
12:31 Chad
So we'll see another decline for them next month.
12:33 Patrick
So very, very interesting to see what happened there. You know, Balcones Heights, uh, you know, again, seeing declines. You know, that's more that urban, urban core center, uh, or sorry, suburban outside the urban core center. Uh, just surprising to see some of those numbers and those decline-
12:50 Chad
'Cause you got Alamo Heights with about a twenty percent increase.
12:54 Patrick
Correct. And just because I like to say it, Dilley, Texas, Dilley Dilley, down forty-two percent. Uh, big decline.
13:01 Chad
I can't believe that you can really say that as a, uh, a Coors Light aficionado.
13:06 Patrick
Hey, I like my, uh, I like my beer to be cold lagered. It's very important.
13:10 Chad
Do you like it to be redundant?
13:12 Patrick
Redundant, yeah. So I'm not sure if that's ever hit a podcast, our argument over the, the term cold lagered or not, but-
13:21 Chad
Oh
13:21 Patrick
... just very interesting to look at that. So, uh, I wanna jump into Corpus Christi and Kingsville, but McAllen and, and Edinburg, obviously it's a smaller region. Um, but man, they, they bring in about fourteen million. They were down about a million in that region, seven percent down. Jumping into the Corpus region, um, you know, down thirteen point eight four percent. Uh, clearly leading the way on the loss is Corpus Christi at thirteen percent.
13:46 Chad
Yeah.
13:46 Patrick
Uh, saw significant loss. The adjoining city, Portland, where there's a bunch of manufacturing and industrial, did see an increase of four point three eight percent. Uh, but Alice was down twenty-one. Um, and, and just like Galveston, Port A, um, you know, they came in down one percent. Uh, but, uh, you know, they, they did come down. And then Rockport also saw a pretty significant decline of ten percent. Uh-
14:12 Chad
Yeah
14:12 Patrick
... so all those kind of, you know, beach towns.
14:14 Chad
It's rough for Corpus. They had eleven percent growth in twenty eighteen, eight and a half last year, and then to be down thirteen percent this year.
14:21 Patrick
Yeah, it's tough.
14:22 Chad
It's a pretty big hit.
14:23 Patrick
That is a pretty big hit, and so... Yeah, but hopefully that levels out. Hopefully that's a, that's a one-year elastic issue, and, and we can bounce back off that number. But, um, big number, big surprise at a massive fifty-eight percent loss, Gregory, Texas. Just to say, just to give you some input here, Gregory, Texas in '19 had a huge increase and then a huge decline. So they went from twenty-eight thousand a month to a hundred thousand a month, down to forty-two thousand a month. So, um, in the grand scheme of things, it's, it was probably a big one-time payment that occurred in that September twenty nineteen number. All right. Are we ready to go to the oil field?
15:06 Chad
Uh, let's, let's keep going through Central Texas before we head out west. Let's jump up to Austin, Round Rock, Georgetown. You gotta switch to the MSAs instead of the CSAs.
15:19 Patrick
Gotcha.
15:20 Chad
So Austin, Round Rock, Georgetown. Is this right? Two percent growth?
15:25 Patrick
Yeah. When you break it down by MSA.
15:28 Chad
Oh, San Marcos had a hu-huge month. Yeah. So Austin is down about ten percent. Round Rock up two, uh, two percent. San Marcos up fifty percent.
15:39 Patrick
Yeah. That's a big increase. Gonna be real interesting to see. Now, they had a, they had a decline last year in September of '19. Uh-
15:47 Chad
Okay. So last year they had a huge audit reduction, about five hundred thousand. So that would account for about thirty-five percent of the, of the increase?
15:57 Patrick
Correct. Still a big number either way. Still a big number. The city of Austin, though, I mean, looking at the urban core of Austin, down nine point seven one percent. So city of Austin still saw significant declines-
16:10 Chad
Yeah
16:10 Patrick
... much like Fort Worth and Dallas, or really Dallas and Houston. Fort Worth I-- Fort Worth performed pretty well.
16:17 Chad
Austin's about forty percent of the revenue in that MSA.
16:21 Patrick
Yeah, it's a lot of it, for sure. Um, you know, but some vacation areas, um, you know, once again, like, uh, lake areas, some of them did well, some of them didn't. Like, Bee Cave came in at, you know, r- down three point two eight percent. But then Lakeway, Texas coming in strong at thirty-four point three one percent up. Um-
16:41 Chad
Yeah. I mean, even some of the... You talked about Round Rock, San Marcos, Georgetown, Cedar Park, Pflugerville, all up pretty... almost all of them in double digits. Cedar Park just missing it.
16:52 Patrick
Oh, yeah. Barbecue country did well as well. Dripping Springs, Lockhart, both up nine and seven percent respectively. You know, my buddy in Elgin that I went to college with, the mayor of Elgin, he's up a hundred and seventy-three percent.
17:04 Chad
Wow.
17:06 Patrick
That's a big number. What, what'd they do in the previous year? Looks like they were missing something in '19. So they, September of '18, they had a hundred and eighty-four thousand, then they went to eighty-one thousand in, in-
17:16 Chad
Yeah, there's a hundred and twenty-two thousand dollar audit reduction last year.
17:20 Patrick
Yeah. So we should convince them that they can take that over a prolonged period of time, in like five years, pace it out with no interest.
17:28 Chad
Usually, if it's a large enough percentage of your monthly collections, they'll, they'll let you do that.
17:32 Patrick
Yeah, which, uh, you know, a hundred, a hundred and something thousand on a two hundred thousand dollar collection month, that usually they're gonna give you like three to four years to pay that back. If anybody's ever been through that process, what happens is when the comptroller does an audit, they send you this really friendly letter that kinda gives you some options. Those aren't your only options. You can negotiate with them a little bit. I think, Chad, you were successful negotiating with them one time to prolong it just a little bit more. Um, but you know, it's usually a pretty friendly and fair process. Uh, but you know, if you have a whole bunch of fund balance, you can just take it all in one month.
18:05 Chad
Jump over to, to your neck of the woods, Bryan-College Station.
18:10 Patrick
The homeland.
18:11 Chad
Let's seeAlmost 10% down in Bryan-College Station.
18:16 Patrick
Yeah. So Bryan took a significantly larger decrease-
18:21 Chad
Yeah, than College Station did
18:21 Patrick
... sixteen percent. Yeah, so let- dig into that Bryan data real quick and, and see what you see. College Station was down three point nine five percent. I mean, still though, guys, for Bryan-College Station, we have to remember there's like 70 to 80,000 people that are missing from these towns because they weren't there. Now, they are back in, in August, so we're gonna see those numbers show back up in October, um, where the students kind of return. And, and I actually drove through there, uh, last weekend. It was, it was fairly busy. But, uh, you know, everybody who is from Bryan-College Station, uh, or lives there permanently, they'll tell you the best time of year is the summer because, uh, you know, you can get into restaurants, you don't have to wait for anything. It's, it's pretty fantastic. But, uh, you know, when we s- when we see these down numbers, I'm just amazed that College Station's only down 4%. Uh-
19:11 Chad
So Bryan had a-
19:12 Patrick
It's crazy
19:12 Chad
... big audit increase last year. So if you take that out, it's about closer to 9% decrease this, this month, which is still, still pretty big.
19:21 Patrick
Still pretty significant.
19:22 Chad
Especially relative to College Station.
19:24 Patrick
Yeah. Uh, the outskirts of that area, though, uh, you know, Hearne was up 10%. Uh, Caldwell was down 24. Uh, Somerville, where the lake is, not huge numbers in Somerville, but they were up 39%. They only bring in about 25,000 a month, so that's not a, not a huge number. Calvert always surprises me. Anybody ever drive through... You ever drive through Calvert, Chad, on Highway 6?
19:49 Chad
Uh, is that between... I, I, I feel like I shouldn't even ask this question. I should just look it up and tell you.
19:55 Patrick
It's right, it's... So it's... When you, when you leave College Station, like going back towards Waco, you hit Hearne and then Calvert.
20:00 Chad
Okay. Yeah, I'm sure I've driven through it then.
20:02 Patrick
Uh, Calvert, it- it's kind of... I've driven through it now for, gosh, 12, 13 years at least, maybe 14, 15. But, uh, the downtown, like, keeps developing. The old historic downtown, it used to be just all empty buildings, and now it's a bunch of little shops and cafes and antique shops and stuff like that. So, uh, it just surprises that they, they only do, like, nine or $10,000 a month in sales tax. Um, it's a really small number for what... I mean, just driving on Highway 6, they have kind of a bunch of stuff there, um, which is, which is surprising to me. 'Cause you would think a couple of the fast foods that they have there are doing two to $2,500 a month of sales tax. So a lot of room to grow there for that, that small town.
20:49 Chad
All right, let's move up then, uh, just keep going up Highway 6 to the Waco area. You got Waco coming in about 8.4% down. Hewitt with a big increase. Lacy Lakeview with a big increase, 43 and 46% respectively. Robinson up 5%. Woodway is down 8%.
21:07 Patrick
Yeah, Robinson's growth, you know, Robinson's got, um... They've got some of that shopping and mall property in Robinson. So to see growth there, that's pretty significant. You know, if you, if you watch, uh, what's the Joanna Gaines show? What's the name of that show? They do a lot of, they do a lot of house-
21:24 Chad
Is there a new one?
21:25 Patrick
No, no, no, no. It's the... I can't remember the name of the show. Susie's gonna kill me. But, um, anyways, the, the houses-
21:32 Chad
Fixer Upper
21:32 Patrick
... they flip, a lot of those houses-
21:33 Chad
Yeah.
21:33 Patrick
Fixer Upper, thank you. A lot of the houses that they flip are in McGregor, Robinson, and Woodway, if you watch that show. Thought I'd point that out. And McGregor and Robinson are all seeing very strong growth, 15% and, uh, 5% respectively for both of them. And, you know, Woodway is the only one that saw some loss. Digging into those Woodway numbers, get a better idea where they were. They had some pretty big growth last year. Most of that growth from last year, about half of that growth last year was audit. They had about $45,000 in audit growth that year. So, uh, it's not as substantial as it looks once you adjust for the audit growth. So actually, when you adjust for the audit growth, they still be positive.
22:13 Chad
Yeah, it's actually, it actually is positive.
22:15 Patrick
Correct.
22:16 Chad
Yeah.
22:16 Patrick
So.
22:16 Chad
All right, let's keep pushing westward. Abilene, how'd we do here?
22:20 Patrick
So down.
22:21 Chad
Down, but modestly.
22:22 Patrick
Yeah, so-
22:22 Chad
3.8%.
22:23 Patrick
Modestly. Uh, but that Abilene market, I mean, y- you know, talking about those, those cities in that area, they've generally been immune to COVID so far in sales tax. We haven't seen a lot of loss, so to see some loss there was, was pretty sig-significant. Um, but you've only got, like, five major sales tax generators in that area. I mean, outside of Abilene. Abilene generated $3.8 million in sales tax, down 3.86%. Uh, Stanford was up 10%. Ty was down 10%. Clyde, Clyde America, as a friend of mine in college used to call his hometown.
23:00 Chad
Yeah. But that's three, 3.8 million-
23:02 Patrick
3.8%
23:02 Chad
... out of 4.2 million. That's, uh, the vast-
23:05 Patrick
Yeah
23:05 Chad
... I mean, uh, portion of revenue in that area is coming through Abilene.
23:10 Patrick
Correct. So, a good job for Abilene not, uh, not letting their sales tax dollars leave the core. They've done a good job with that.
23:17 Chad
All right, jump down to San Angelo, about 6% decline.
23:20 Patrick
Also another surprise, right? 'Cause San Angelo has, has stayed fairly steady through all this. They haven't really seen many declines. They weren't... I think last month we talked about how surprised we were that they really haven't been impacted by the oil and gas downturn.
23:32 Chad
Yeah, between them and, and Abilene, sort of the, like, Midwest Texas had been doing pretty well.
23:38 Patrick
Yeah. And they host a lot of the kind of administrative structures of some of the oil and gas companies that, that go out to Midland and Odessa.
23:45 Chad
Yeah, which if we go out that way, it's just that-
23:48 Patrick
Yeesh
23:49 Chad
... that trend is just continuing.
23:51 Patrick
It's, I mean, when it stops, folks, it screeches to a halt.
23:55 Chad
35, 36% down for the region. Both Midland and Odessa about the same, about 36% down. I, I wanna say that's four months in a row now for Odessa.
24:06 Patrick
Yeah. Odessa's seen big declines. It's 35%, so-
24:12 Chad
Midland was only down 21% last month, so they've, uh-
24:15 Patrick
Yeah, so let me-- So let's start back in April for Odessa. Are you ready for this?Starting in April, 20% down, 10% down, 33% down, 35% down, 32% down, 35% down.
24:30 Chad
Yeah. That's just brutal.
24:31 Patrick
Where's the bottom? Yeah. Where's the bottom? Like, are you just waiting for everything to be 30% down? You remember when we went through the downturn in 2000 and like '9 and '10, I know you were kind of between jobs. You were, you were currently-- I think you were in Fort Worth at the beginning of it, and you were in Weatherford like towards the, the end of the, of the run, right? But I just remember looking at the kind of the mid-range larger cities, like Weatherford, for example, because we were right next door to him, and Hudson Oaks was positive like six to nine months before Weatherford was. But it was just, it was just like, when are-- when, when do you find that new normal? Like, that's, that's the, that's the rut that Odessa is in right now. It's like, when do we find that new normal? And, and they've been in it since December. They've been negative since December. They've not had a positive month since December. Wow.
25:20 Chad
Yeah. Midland's been negative since January. Not quite as severely-
25:23 Patrick
So-
25:23 Chad
... but still on that downward arc.
25:26 Patrick
Yeah. Which th- you know, the, the interesting thing is, is that the downward arc actually began before oil prices dropped, right?
25:35 Chad
Well, yeah, if they've been, if they've been down since December and January.
25:38 Patrick
So sales tax almost predicted the downturn in, in oil and gas?
25:41 Chad
I don't know.
25:42 Patrick
I'm not sure we can actually-
25:42 Chad
I don't think there's a causality there
25:44 Patrick
... clean that, but Uh, can we, can we call on the statistics professor at, uh, at UNT to help us with that one?
25:52 Chad
So move north, Lubbock. Lubbock, Plainview, Levelland, uh, basically flat. Let's see. That means Lubbock was... Actually, Lubbock had about two percent growth.
26:02 Patrick
Yeah.
26:03 Chad
So it's healthy, all things considered.
26:05 Patrick
It's another one like College Station, Bryan. Students are back, so there's some bright-- there's some brightness there.
26:11 Chad
Yeah, Levelland took a pretty big hit, thirty-five percent down.
26:13 Patrick
Brenham took a huge hit, man, twenty-two percent. I know I'm jumping ahead. I'm starting to look at some of the smaller, kind of small, larger towns. But, uh, yeah, Andrews, Texas, which is, you know, it's got a lot of oil and gas business, very specific. Th-th-that region, that Brenham region took a big hit, which is really just Brenham and Burton, almost all Brenham.
26:33 Chad
Yeah, Levelland had a rough go this year. They've been down since October. Okay, jump up to Amarillo. Go ahead. You got something else?
26:42 Patrick
Sorry, hold on one second. Br- yeah, Brenham was actually only down one point nine one percent. Sorry, I had that wrong on the MSA look. I don't want to give all our friends in Brenham a heart attack with that statement. Sorry, moving on to the next one here, Chad.
26:54 Chad
Amarillo.
26:56 Patrick
Amarillo by morning.
26:57 Chad
Amarillo, Pampa, Borger. On the whole, two point three percent up. Amarillo's pretty much flat, about half a percent growth. Is it Pompa or Pampa? Probably Pompa. Is it Pampa?
27:08 Patrick
Pampa.
27:09 Chad
Okay.
27:09 Patrick
No, it's Pampa, it's Pampa. I've got a friend from there.
27:12 Chad
Yeah.
27:12 Patrick
Pampa.
27:12 Chad
Solid growth, twenty-eight, twenty-seven and a half percent. Good growth in Canyon. Good growth in... Well, you start to get into, uh, past Canyon, and it's, uh, smaller revenue totals, but Double Oak, Panhandle-
27:26 Patrick
Yeah
27:26 Chad
... Fritch, Vega, all of them, White Deer.
27:28 Patrick
So does Amarillo win the award?
27:30 Chad
What award?
27:31 Patrick
As the healthiest r- as the healthiest region in the state?
27:34 Chad
Uh, El Paso. We haven't been out that far west yet.
27:38 Patrick
Oh, we haven't been there yet. Oh, they have some competition. So the Panhandle and West.
27:44 Chad
Let's jump up there.
27:45 Patrick
What do we got from El Paso?
27:47 Chad
Three point seven percent growth as a region, three point two percent for El Paso. Horizon City. Let's see. Everybody but Vinton and Dell City out in that area saw growth this month.
27:58 Patrick
So Amarillo, I'm sorry, but you get beat by El Paso this y- this, uh, this month in September. Very interesting to see that growth. So yeah-
28:07 Chad
You hit the s- Brownsville area, right?
28:10 Patrick
I-- No, I, I don't think we did.
28:11 Chad
Okay.
28:11 Patrick
I, I think we, we did not hit Brownsville, Harlingen, Raymondville.
28:15 Chad
So-
28:15 Patrick
Obviously, still down
28:16 Chad
... still down almost eight percent.
28:17 Patrick
Yeah. South Padre Island. Woohoo. You see that? Thirty-three point two four percent. Port Isabel, which is where you don't speed, right next door to South Padre Island, twenty-six point nine nine percent. Um, wow. I mean, just, just huge drops-
28:35 Chad
Yeah
28:35 Patrick
... in those areas that, uh-
28:36 Chad
Really across the board. Brownsville, eight percent down. Harlingen down three.
28:40 Patrick
Yeah. I'd love to talk to somebody at South Padre Island and figure out exactly why their drop is so much. I mean, I know it's gonna be related to people going to the beach in July. It's a very popular destination, but-
28:49 Chad
Yeah, it's just a lot more remote than-
28:51 Patrick
I wonder-
28:51 Chad
... even like a Corpus or a Galveston.
28:54 Patrick
Yeah, and I wonder if the reduction in border crossings has something to do with that. I know Brownsville and Harlingen, you know, a lot of their economy is, is due to, you know, border crossings and people shopping. So that's a... those are very, very big numbers, significant numbers.
29:10 Chad
Okay. Let's jump up quickly to East Texas. What do you say?
29:15 Patrick
Sure.
29:15 Chad
So Tyler, the Tyler area, one point six two percent down. That's not the city specifically. City of Tyler was down three point seven percent. Uh, but you got Lindale, Whitehouse with some growth. Really outside of Tyler proper, everyone in that MSA had some growth.
29:32 Patrick
Tyler makes up a pretty substantial portion of that MSA. Um, there's no doubt about that. Uh, Jacksonville came in strong.
29:39 Chad
Lufkin area-
29:40 Patrick
Lindale
29:40 Chad
... had some growth as well, two and a-- two point six percent for Lufkin. Where's Texarkana? Texarkana up fourteen percent.
29:48 Patrick
Yeah.
29:48 Chad
City itself up eleven. New Boston, thirty-five. Nash, twenty-one. Phew. Man, you got growth all over the place over there.
29:57 Patrick
Yeah, I know. That's wild to see that.
29:59 Chad
All right.
29:59 Patrick
That's an entire region positive.
30:01 Chad
Yeah, every single one.
30:03 Patrick
Texarkana.
30:04 Chad
Uh, far north Texas, the Sherman-Denison up almost four percent. Sherman down, Denison up.
30:10 Patrick
Yeah, Denison growing.
30:11 Chad
Uh, four percent and ten and a half percent respectively.
30:14 Patrick
Denison growing like a weed out there. Just saw they posted a job for an assistant city manager, if anybody's looking. Great manager over there. Good guy to work for.
30:22 Chad
And then Wichita Falls down one and a half percent. The city down two point seven, but you got Burkburnett, Iowa ParkHenrietta all showing growth. So really, man, this, this month just seems to kinda defy everything that we've seen for the past two or three months um-
30:37 Patrick
That's correct. It's totally so, yeah
30:39 Chad
... before the numbers came out, we did our own little internal, uh, estimates on where the statewide numbers would be. We were all way, way optimistic. I think I said one point two. You said one point five. Um, so to see that number come in at, what, what did you say it was? Four, four and a half percent down?
30:56 Patrick
Yeah, four, four eight, four point eight percent down.
30:59 Chad
So, uh, talk about internet sales because that's gonna be not... It's not gonna entir-entirely explain the declines this month, but it does play a part in it.
31:10 Patrick
So you're specifically referring to sales tax on internet services.
31:14 Chad
Yes.
31:15 Patrick
Right? So a federal law was passed a number of years ago, uh, which was like the Internet Freedom Act or something like that. But it basically specified that, um, internet services... 'Cause y-you used to be able to tax internet services over a certain amount. Uh, so and when we say that, like, you go get internet service from Spectrum or from, um, AT&T or Verizon or Frontier, whoever that may be, and you pay sales tax on a, a certain portion of that, and that sales tax goes back to the local city in the state. That ended on July first. So this is the first month that we've seen that those companies are no longer collecting sales tax on internet services. Uh, so it's important when you dig into your data to make sure that your data in, shows those decreases, and if they don't show those decreases, you may wanna get with those taxpayers to see what is going to be audited out later.
32:11 Chad
Yeah, because if you're still getting th-those payments, they're going to be taken away at some point.
32:15 Patrick
They're, they're... It's unlawful to tax it by federal law, so they're going to be refunding customers, and they're going to be clawing that back from the comptroller. But I think with the declines that we saw, you know, I figured it would be a couple of percent across the state, but I think with the declines that, that, that we're seeing this month, it, it looks like it's already baked in. It looks like it's already there. We won't know, obviously, until we get that data. We've made the request to the comptroller. We should see that data in a couple of days, and we'll be able to tell what are... You know, we saw significant declines. I'm sure we'll have some type of, like, written blog post to talk about the impact to telecom.
32:50 Chad
Yeah, it really depends too because if your telecom providers have been correctly handling sales tax, uh, wherein the, the address of service is where the sales tax is due, then the impact-
33:02 Patrick
Mm-hmm
33:02 Chad
... might be a little bit more spread out to you. Um, if you are in a situation which, uh, some cities are in, where there is a, an internet provider located in that jurisdiction and all of their sales tax is going to that place, then, uh, it could be an even bigger decline. But either way, it's a new change to your sales tax which, which certainly would result in at least some of the decrease that we saw this month.
33:28 Patrick
Correct. Yeah.
33:29 Chad
So where do we go from here, Patrick? Does this, does this one month start a new trend? Is it, is it a blip? Do you have enough information to, to make a guess?
33:39 Patrick
I don't have enough information to make a guess. I, I would, I would once again say, just like we said four months ago or five months ago, "Don't panic." We're kind of all over the map with COVID. It's, it's still been pretty even for most people outside of West Texas. Um, you know, we haven't seen catastrophic statewide losses, um, especially in the suburbs. You know, the bigger cities are dealing with their own problems. Houston, Dallas, you know, Fort Worth, Austin, um, they're dealing with the fact that people just aren't downtown anymore. They're not in offices. So that, that's, that's a structural issue that they're gonna have to fix. But otherwise, most cities are not gonna see a significant decline and loss and, and I, I think you just kinda need to sit tight. Let us roll through this. If, if you look back at the date, you know, July was the mask up month. It was the cases are skyrocketing. You know, there was a lot of talk in July, kinda like there was in April and early May, um, about, you know, we're gonna have a second round. Um, and, and so I think that probably had an impact on what's going on. I think the politics of that have had an impact on what's going on. So I would, uh, I would just be patient. I don't think we should make any drastic decisions on this, and we're so close to the end of the budget, the budget year. You're not really gonna be able to do anything at this point anyways. So let's just roll through the end of the budget year. Get started on October first.
35:07 Chad
Yeah. It's, it's really tough because the last couple of months have kinda defied the conventional wisdom. You know, we saw, uh, we've seen growth where we didn't expect it. We saw declines that were lower than we expected, or I guess declines that were less severe than we expected is the better way to say that. Um, so to come off a couple months where across the state we had growth and now we've got this, this big decline number, four point eight percent, uh, it's tough to say that that's gonna be a new trend. Obviously, you mentioned the, our friends in the West Texas area. Um, they've been dealing with this before COVID really became an issue. So, uh, you know, th-they're already kind of... I think they, they can probably have a little bit different mindset than everyone else, and they deal with those fluctuations more frequently because they're so dependent on the oil and gas industry. But yeah, I, I wouldn't jump the gun and say that this one month worth of declines is, is the new trend. Um, I think that it's really... There's still so much unknown, and no one knows when we're gonna get out of this. And I do think that over time, uh, if, if this environment that we're in continues, there will potentially be sort of a compounding effect where, um, you know, the longer it goes, sort of the, the worse it's gonna get, um, until we finally get out of it.But that's just my opinion. I, you know, I don't really, I don't really have any, like, scientific reasoning to back that up. It just seems to make a little bit of intuitive sense that, uh, that the longer it goes, the less optimistic people are gonna be about getting out of it. But we always say, "Don't, you know, don't make, uh, rash decisions based on one data point." Um, so let's just kinda ride this out for an- a couple more months and, and see how things go. Could totally change again next month.
36:57 Patrick
You know, look, it is a wet blanket month, there's no doubt. It's cold. It's rainy outside, I think across almost the entirety of the state right now, um, except maybe in Houston and South Texas. Uh, but, you know, this is something that is one data point. I think, Chad, you said that best. And, uh, and let's not read in too much into it at this point. Let's come back next month and put a smile on our face. Uh, I would stay tuned to us as we get the data for the cities that we represent and we get a better idea of where the losses occurred and what industries. Uh, I'd stay tuned for something on that, either a, uh, a blog post or a newsletter or a podcast. We're gonna talk about that, especially the telecom internet services, uh, side of things. We need to get a baseline of how much loss that's gonna be across the board, uh, because it's gonna change everybody's numbers moving into the, the next year, right? Uh, until that works its way through a full 12 months, you're gonna have a loss from that number. So just important to remember that. But yeah, I wouldn't get too worried about it. And, uh, you know, we'll, we'll come back next month and look at the data, and hopefully it'll be a little more positive than what we're seeing right now.
38:00 Chad
Now, so as for the sales tax game day, so we're still working on... This is the second time we've done it. We're still working on some of the tools that we use to help quickly look through all of the statewide data. Um, I think at this point, Patrick, would, is it fair to say that our goal is to actually make this a, a live stream so that people can see what we're seeing and kinda look through it, ask questions, and, uh, and kinda go through it with, with everyone?
38:23 Patrick
Yeah, I think, I think our goal would be to, to have some type of live stream on social media platforms that people would be able to go into and watch. Um, and, and they could interact with us as we're talking about the data. You know, if they want us to dig in deeper to a certain city or a certain area and give our opinion on it, we could really do that, uh, live for folks. Uh, I'd also like to see... I'm actually gonna use your favorite term here. I'd like to see some type of gamification of the sales tax day. We used to do that all the time in Hudson Oaks, where we would set, like, an over-under. Um, I'd love to pick a city across the state and, uh, try to, try to allow all our clients to guess what that number's gonna be, right? Um, that- that's always fun to me. It kinda brings some joy to the sales tax day. And I know there's probably 25 or 30 other nerds out there like me that sit there at 9:00 in the morning on sales tax day and, and just keep hitting-
39:14 Chad
At 5:00, at 5:00
39:14 Patrick
... reload until the data comes up at 9:00. Yeah, right. So, um-
39:19 Chad
Yeah, but there's all kinds of-
39:19 Patrick
So I, I just think it's-
39:20 Chad
... all kinds of prop bets and stuff you can, you can take.
39:24 Patrick
Correct, yeah.
39:25 Chad
No money exchanging hands.
39:26 Patrick
We're not talking Vegas over here.
39:26 Chad
It's not actual gambling, just, just for fun.
39:29 Patrick
Yeah, like, uh, maybe we could, like, pass around a, a statue to each city that wins that they could put on their desk for a month before it goes to the next city. Of course, in COVID, we would have to, like, use a Lysol wipe on it before it goes.
39:39 Chad
Yeah, some heavy sanitation.
39:40 Patrick
But, uh, heavy sanitation. But, you know, look, just trying to have a little bit of fun with the sales tax data. Obviously, this month's data is not great. Uh, but we're trying to get out there and, uh, just make everybody knowledgeable to what's happening statewide.
39:54 Chad
Yep.
39:55 Patrick
So-
39:55 Chad
And if you happen to be in a city that experienced some substantial losses this month, if you don't... You don't have to use us, for, to analyze this information. You know, we're not trying to sell sack tax. Just ask for the data from the comptroller at the very least. Make sure you're getting this information so you can see which businesses were up, which industries were down, a- and get a better handle, because this, as you can probably tell just from our conversation today, just looking at the top-line number doesn't give you a lot of granularity. It doesn't give you a lot of insight into what's going on. So we're just kinda having to look at high-level trends, uh, look at audit and payment timing issues. So if you really wanna get a handle on what's happening with your sales tax, you have to have that confidential data. So at the very least, uh, just ask the comptroller for it so that you can have that information.
40:45 Patrick
Well, hey, guys, thanks for tuning in to the Game Day segment for September 2020. Uh, we appreciate you guys, uh, getting here. My name is Patrick Lawler. I wanna thank Chad for doing it again for us. And hopefully, uh, when we get into this next month, we can eventually get into our live stream. So we'll see you guys next time.
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September 10th, 2020
Updated Oct 27, 2025
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