The Woodlands Township is seeing an estimated $2.44 million dollar increase in sales tax revenue compared to this time last year—partly due to a surge in tourism-related efforts.
The most recent sales tax deposit reports by the township show data through June 30. For the first six months of 2011, the township earned $16.2 million in sales tax revenue. This year’s revenue total for the same six-month period is $18.65 million.
Monique Sharp, assistant general manager and finance director for township, said the township is seeing increased sales tax activity in several categories, including retail, hospitality, telecommunications, commercial construction and oil and gas.
“The township and the CVB [Convention and Visitors Bureau] have been very successful in attracting visitors, conventions and tourism,” Sharp said. “Those aspects factor into the increase in sales tax revenue.”
In addition, The Woodlands has brought in approximately $2.33 million more in sales tax revenue than the estimated $16.32 million budgeted for January–June. Last year, township officials budgeted for a 4 percent overall increase in 2012 sales tax numbers based partly on Texas Comptroller statistics for the region and state.
Sharp said the 2012 budget was created when the national and global economies were experiencing financial declines.
“In oil and gas and telecommunications, we were not expecting the sales tax numbers we have received,” Sharp said. “Obviously, it has way exceeded our expectations.”
Generally, about 75 percent of sales taxes are used to offset property tax requirements. The other portion of revenue is used to fund a variety of township functions, including law enforcement, the fire department, the CVB, trolley service in Town Center and principal and interest payments on outstanding debt service.
Sharp said since the township has collected an estimated $2.44 million in sales tax excess over the anticipated budget, a large portion of that revenue will fund the capital replacement reserve. The reserve is primarily used to pay for the replacement of assets, but it can also be used to make capital repairs on those assets, Sharp said.
“We have about $220 million dollars worth of assets in things like over 100 parks and pathways, tennis facilities, park playground equipment, sports fields and 13 swimming facilities,” Sharp said. “For instance, we put in a pavilion and it has an estimated useful life of 10 years. We fund the [capital replacement] reserve, so the money will be there to replace that asset without having to impact property taxes for that year.”
Currently, township sales tax deposit numbers are on track to surpass the $31.51 million dollar budget estimate for the entire year.