Record sales receipts signal disaster recovery

Two of the five worst rainfall events in U.S. history, back-to-back hurricanes, a record ice storm and a year-long COVID shutdown should have sent the Orange County economy reeling.

They were devastating to many property owners and non-essential workers, for sure.

But that’s not what sales tax figures say.

Despite hurricanes Laura and Delta aiming 100 miles per hour winds at trees and rooftops while homeowners still struggled with the aftermath of Tropical Storms Harvey and Imelda, this economic indicator trended up.

Everyone decried the shutdown of bars and restaurants and tattoo parlors and barber shops and Gov. Greg Abbott didn’t end his restrictions until more than a year had gone by.

So why are local sales tax receipts reaching record highs?

“Through all the things, disasters, COVID and all that, our sales tax continues to climb. I can’t explain it,” County Commissioner Robert Viator said Tuesday.

County Treasurer Christy Khoury filed in the court’s minutes a direct deposit from the State Comptroller of Public Accounts in the amount of $666,093.46 at this week’s Commissioners Court.

That is from sales tax collected in Orange County in March (though the Comptroller calls it the May payment). The total local sales tax of 8.25 percent for each covered purchase is sent to the state by merchants and 0.5 percent (1/2 cent per dollar spent) is returned to the county.

Tuesday’s announced return is the highest Khoury says she’s ever seen.

A check of the Comptroller’s website shows it’s the largest monthly receipt by the county in the records, which date back to 2013.

Figures on the website show that the $666,000 figure is a 32-percent increase over March 2021 receipts and for the past five months, the total sales tax received by Orange County -- $2.8 million – is 18 percent over the same period last year.

At that pace ($560,000 per month), the county would collect $6.72 million for a year.

Jay Trahan, Assistant City Manager for Orange, said Orange received $244,000 this month for its half-cent of sales tax receipt that funds its Economic Development Corporation.

The city also gets another full-cent allocation that goes to its general fund.

“That’s a significant increase,” Trahan said.

Import tariffs, COVID-caused shutdowns of manufacturers and world-wide computer chip shortages have been blamed for the price of everything increasing in recent months.

But the trend for higher and higher sales tax receipts for Orange County didn’t start this year.

Orange County total-year sales tax receipts for 2020 were $5.75 million, the highest since at least 2012 and probably ever.

That followed $5.3 million in both 2019 and 2018, according to the Comptroller. The county’s sales tax receipts were $5.1 million in 2015.

A tight market on building supplies typically follow storms, with homeowners repairing their houses themselves or hiring contractors and few places have had as many storms do damage as Southeast Texas.

“I’ve just heard everybody talking about the price of lumber,” Viator said, “Ten dollars a stud, $90 for a sheet of ¾-inch plywood.”

Brad Childs, Orange Councilman and owner of Childs Ace Hardware and Building Supplies, compares this sales boom to one that occurred after the terrorist attacks on America on 9/11 in 2001.

“I can compare these last 14 months to what happened right after 9/11 and for months afterward,” he said.

“Planes were grounded, vacations canceled, people stayed close to home. Instead of spending money out of town and out of the country, people sought comfort in their own backyards. Many made their own oasis at home with money that would have otherwise bought them a week aty a resort.

“Fast forward to COVID-19,” Childs said. “It has many people spending locally in much the same way as the aftermath of 9/11. Add to that the two wind event storms through our area, an ice storm and the rising costs of so many manufactured goods. As prices go up, sales tax collections will rise proportionately.”

Viator noted that local governments are beginning to start on their 2022 budgets.

“This [more sales tax collections] does figure in. Of course, that will help for the budget,” Viator said.

“It will definitely help everybody’s budget, not just the county’s but the cities’ too.”