News Column

Tax Revenue From beer, Wine Give a Bump to East Texas

March 8, 2013

Dayna Worchel, Tyler Morning Telegraph, Texas

Alcohol sales in January likely played a role in a jump in state sales tax figures for some East Texas cities and in Smith County, an official with the Tyler Economic Development Council said Wednesday.

Voters in Tyler and in Justice of the Peace Precinct 2 approved the sale of alcohol in November. Some Smith County cities saw a large jump in their tax figures compared to January 2012, according to numbers released on Wednesday from the Texas Comptroller. And other cities in Smith County, such as Winona, saw a loss, according to the numbers.

The city of Tyler's sales tax figures rose by 8.08 percent compared to January 2012, but officials are unable to say yet whether the increase is due to alcohol sales. "We are pleased to see an increase in our sales tax revenue after experiencing very slow growth the last few months," City Manager Mark McDaniel said in a news release from the city.

"At this point we do not have enough detailed information to determine which sectors of industry subject to sales and use tax might be up, since the comptroller only reports recent information in the aggregate. More detailed information will be available in approximately three to four weeks," McDaniel said.

The figures represent receipts from January 2012 collections as there is a two-month lag before taxes are reported and remitted back to the city from the state, according to the news release from the city. In January 2012, the net payment to the city from the Comptroller's Office was $2,569,304.59. This January, the figure was $2,776,953.07.

Some cities, such as Noonday, saw a dramatic increase of 45.56 percent, which Mayor Mike Turman attributed directly to beer sales in his community. Turman had not seen the new figures, but he said he thought that "beer sales have helped -- especially because we do not have property taxes here," he said on Wednesday.

Turman said the city of 777 has no property taxes "because we don't want them." He said only two businesses in his city sell beer, and he expects the revenues generated will go toward helping the city maintain some roads in their subdivisions within the city. Smith County maintains all of the county roads, he said.

Some of the revenues may be used to maintain an old school building in Noonday that houses city offices, a library and a food pantry, Turman said. In January 2012, Noonday received $5,238, and this year the amount was $7,625.

James Bixler, city administrator in Winona, said alcohol sales in Tyler have impacted his sales tax revenues. "People are staying in Tyler -- they are not driving here to buy it," he said.

Winona's net tax payment was more than $15,000 in January 2012, and was slightly more than $10,000 this year for the same time period.

Tom Mullins, who also serves as president and chief executive officer of the Tyler Area Chamber of Commerce in addition to his duties at the Economic Development Council, said he is not at all surprised by the increase in state sales tax revenues.

"We expected a jump in sales tax revenue," he said, adding that Economist Dr. Ray Perryman had predicted Tyler's yearly revenues from alcohol sales would be about $5 million per year in a study that The Perryman Group conducted last year.

The Perryman Group showed a $107.4 million boon to the jurisdictions' overall economies. The study also projected 1,653 new permanent jobs and almost $5 million in additional tax revenue, up to 80 percent from sales taxes. The Chamber of Commerce hired Perryman because they wanted an objective look at the expected revenues that alcohol would generate, Mullins said.

Mullins added that executives with Brookshire Grocery in Tyler have remarked that some of their stores have seen jumps by as much as 30 percent since alcohol sales were approved.

"People may go in to buy beer, but while they are there in the store, they pick up chips and salsa and other items," Mullins said.

He thinks that the move to sell alcohol has been a good one for Tyler and for Smith County. "They (the cities) can fix roads and bridges and other things that need to be fixed," Mullins said.



Source: (c)2013 Tyler Morning Telegraph (Tyler, Texas) Distributed by MCT Information Services


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