Breckenridge Texan

Staying home, shopping local drives big increase in local sales tax revenues

Staying home, shopping local drives big increase in local sales tax revenues
July 14
16:43 2020

Breckenridge received some good economic news last week when the sales tax revenue report for May was released by the State Comptroller’s Office. The city saw an almost 27 percent increase over last year. This follows an April report that showed a 14 percent increase over last year.

In March, when the city was seeing the first effects of the coronavirus pandemic — and many of the businesses were closed and a shelter-in-place order was in effect for the city and county — the sales tax revenue was close to even compared to last year at a negative two-tenths percent (-.002) difference.

Uptick in shopping local

Virgil Moore, director of the Breckenridge Economic Development Corporation, said he believes the increase in sales tax revenue was driven by an increase of people staying in Breckenridge and shopping local during the coronavirus/COVID-19 pandemic.

“You know how we always preach ‘shop at home’ … this is what happens when people shop at home,” Moore said. “This is people just not going to Abilene, not going to Fort Worth to shop. They’re buying their groceries — they’re buying basically everything — in town and not going to the city. That’s all it is.”

According to Moore, the increase in local shopping is not just happening in Breckenridge, but in many small communities around the area. He said he is a member of the Texas Midwest Community Network, a group of small communities, and during a recent video conference many of the members discussed how much of an increase in sales tax revenue they have seen.

He also said many of the communities he’s talked to in this region that are as small or even smaller than Breckenridge have seen an increase in local shopping.

Moore said he doesn’t think the recent upswing in local buying is just the result of panic buying, particularly since the latest report they received was for May. “I mean, this was two months into COVID, and I don’t feel like there’s still any kind of level of panic buying going on that showed up in May, and May’s our biggest increase yet,” he said.

One thing Moore noted was that Breckenridge saw the increase even as some businesses were closed or  operating at reduced capacities. “Can you imagine, if everyone was open and allowed to be at full speed, how much we would be up?” he asked.

Sustaining the increase

Whether or not residents will continue the increase in local shopping is still an unknown, Moore said. He thinks it will be sustainable as long as there is a COVID-19 threat and people continue to stay home and shop in Breckenridge. However, once the COVID-19 threat has passed, Moore thinks the community will sustain part of the growth. He said people will see that they can shop at home and it makes sense.

“But, then, we’ll see a lot of them going back to their old habits of going out of town to shop and spending all their money in the larger communities,” he said. “You know when you live in a small town, shopping is more of an experience, more of entertainment. Because you go shopping (in a larger city), you go eat out, then you may go to the show or go do one of the other fun things in the city that you can’t do here. That’s part of our problem, just the draw of a day out of town or something like that. It hurts.”

Capitalizing on the increase in local shopping

With more people shopping locally, Moore said, they’ve become more aware of what some of the local businesses have to offer and that gives those businesses an opportunity to make regular customers out of them.

To keep those customers coming back, Moore said, the main thing a local business owner can do is take care of those customers right now.

“If you don’t have something is stock, say ‘I’ll get it for you, let me get it for you.’ Most of the time they can at a competitive price,” he said. “Hopefully the way they’re treating their customers now … they can earn their support for the future where they won’t have to feel like they have to go out of town to shop.”

Overall local economic outlook

 As for the long-term economic outlook for Breckenridge, Moore said he’s still concerned because the community has lost a number of jobs.

The New Vision housing manufacturing plant closed down, and many people who work in the oil field have either had their hours cut or have been furloughed or laid off. “There’s a lot of that going on,” he said.

However, he said, people are still spending money because they’re getting unemployment benefits.

Moore said he doesn’t think the oil industry jobs  are gone in Stephens County, even though the oil companies were hit on two fronts because of both COVID-19 and the bottom falling out of the oil market. He said the operators and service companies in the area have seen some of this before and he thinks they tightened their belts as much as possible.

“I think they’re just being extremely cautious, and I do think it will be a slow increase to fully stacked up,” Moore said. “Prices of oil still need to go up. Oil producers are not comfortable with oil prices below $50, and prices are still about 40 percent off that. I think it’s going to be pretty tight in the oil patch for another six months to a year, at least.”

Looking forward

Despite some of the recent downturns in the local economy, there are some hopeful signs for the future, too. For example, although the New Vision manufacturing plant closed and the employees were laid off, Moore said he has already leased the building to a new tenant.

RGN Manufacturing Services will reopen the facility as a manufacturing plant sometime in the next few months.

RGN Manufacturing Services has leased the manufacturing plant on the Industrial Loop. During the next few months, they are expecting reopen the facility. (Photo by Tony Pilkington/Breckenridge Texan)

Effects on city budget shortfalls

The increase in sales tax revenue will also have a positive effect on the City of Breckenridge as city leaders struggle with revenue shortfalls in the City’s budget.

Interim City Manager Heather Robinson Caraway said the increase in sales tax revenue will definitely help and is welcomed news. However, she said, she’s still trying to find money for next year’s budget because of other revenue shortfalls in water, sewer sanitation and property tax. She said they’ve seen a decline in almost all those sources.

There also been some major expenses the city is faced with. For example, she said they had been estimating costs of $82,000 for some work that needs to be done at the water treatment plant for ground storage. Then, when they received the quote for the work last week, it was $199,700, more than double what they were expecting.

She said the tax revenue increase will give the city a slight breather and she hopes the next two months’ sales tax revenues are the same.

Caraway said if the effects of the coronavirus continue and local sales tax revenues continue to be ahead, the extra revenue will be factored into the budget when they make mid-year adjustments in 2021.

“If at all possible, we have any surplus, so to speak, then hopeully we can leave it there and we can have better reserves the next year,” she said. “Or, if we have things we need to purchase or fix, we might be able to do something.”


Story by Tony Pilkington/Breckenridge Texan

Cutline, top photo: Many businesses in Breckenridge have seen an increase in sales in the past few months, as residents shopped locally due to the COVID-19 pandemic. The additional sales led to an increase in the sales tax revenue the city receives from the state. (Photo by Tony Pilkington/Breckenridge Texan)

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