Sales tax spike helps Houston

06:46 PM CST on Friday, December 26, 2003

By Doug Miller / 11 News

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HOUSTON – Packed parking lots and mall madness has given the city of Houston exactly what it wants and needs -- money in its empty pockets! And the additional sales tax benefits Houston and you.

The Variety Fair Five and Dime Store has sold all sorts of stuff for 55 years now. And for 55 years, the family that owns the store has seen its share of Houston's economic ups and downs. "We really were hit hard with the unemployment here in Houston," says Cathy Irby. "E specially with your big corporations laying off so many people."

After a rough 2003, the folks who run the place have noticed the first signs of a turnaround. "Probably in September I started seeing things increasing a little better," says Irby. "Halloween was a pretty good month."

What's happening in the little dime store during the past year reflects just might reflect what's happening to Houston's city budget.

For a long time in Houston shoppers were spending a whole lot less money than economists expected. That meant sales tax revenues were lower than the city government expected. And that's one of the big reasons the city budget has been in trouble.

Houston's sales tax collections were down about five percent in March, eight percent in April and nine percent in May. But in September they squeaked up about one percent, jumped nine percent in October and rose two percent in November.

And when you're talking about all the services provided by a billion-dollar city government, that could have a huge impact.

"Sales tax is 25 percent of our general fund revenue," says Houston City Controller-elect Annise Parker. "We have another bad Christmas season, we're hurtin'. Right now the budget gap, the estimates between the controller and the mayor, has narrowed. And we're down to about $8 million."

So Houston's city government still expects to come up about $8 million short during the first half of next year, even though Houston shoppers are shelling out more nickels and dimes on sales taxes.