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Galveston Economic Report
David Stanowski
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Texas Economic Indicators
by David Stanowski

Sales tax collections are a very good proxy for overall economic activity, excluding investment. They are also far more accurate than widely-used indicators like GDP, unemployment, and inflation whose definitions are constantly changed and manipulated by the federal government.

Statewide collections in Texas bottomed in March 2002 and March 2003, after the 2000 stock market top, and then doubled between March 2003 and the high in August 2008. Since then, they have been in decline.

Note: Collections posted for a given month represent sales a month or two before that date.

The year-over-year rate of change in statewide sales tax collections spiked in April 2004 due to Project Pay Up, a tax amnesty program, and more recently saw their rate of growth peak in April and October 2006. Growth turned negative in February 2009, and has remained so for the last 12 months.

Notice how the year-over-year rate of change of sales tax collections, for all states combined, recovered to -4.2% in 4Q 2009. During that same period, the State of Texas showed a rate of -12.7%, three times worse than the national average!

Total State Tax YoY Rate of Change

The rate of total state tax collections peaked in 1984, with another lower spike in 2005, and they have been in steep decline since then!

Under construction; more to come.

Under construction; more to come.

For more information on the Galveston Economy: Click Here


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