Comptroller Susan Combs (2011 AP photo)
Texas finished the fiscal year with a higher-than-expected yield of sales tax.
In August, the state took in $2.57 billion, up 7.5 percent from a year earlier, Comptroller Susan Combs said Wednesday.
As recently as December, Combs predicted sales tax receipts for the year would increase by a mere 3.5 percent. (Click here and go to page 34.)
By Aug. 31, when the budget year ended, sales tax generated not just the nearly $26.8 billion she had forecast but an additional $515 million.
“Fiscal year 2014 ended with total collections at $27.27 billion, up 5.5 percent over the previous year,” she said.
Combs credited gains “in both business and consumer spending.”
Explaining last month’s uptick, she pointed to producers of oil and natural gas and merchants – both retail and wholesale.
Combs and her aides have warned that an oilfield boom boosted by hydraulic “fracking” techniques may not continue its rapid growth in West Texas and South Texas.
Increased drilling activity spins off lots of purchases. On each, the state collects its 6-¼ percent tax.
Eva DeLuna Castro, who closely tracks state revenues for the Center for Public Policy Priorities, which advocates for increased spending on education and health care, said Combs issued “very conservative forecasts” in the past few years.
That was partly because the retiring Republican comptroller expected the Great Recession to curb consumers’ spending habits, creating a more austere “new normal,” DeLuna Castro recalled.
As it turned out, that proved wrong, the analyst said.
“Americans had all kinds of bills to pay and then they went out and bought new cars,” DeLuna Castro said. “So that reduced the savings rate.”