Sales Tax Revenues Decline Year-over-Year

After internal adjustments are made to the data, Austin indicated a 2.4% decline this month in sales tax revenue allocations compared to the revenue collected in February 2009.  Fort Worth and San Antonio were down 0.2%, Dallas was down 4.2%, and Houston was down 12.4%.  These cities will likely see the declines in sale tax allocations reflected in increased vacancies (your lease is terminated because you can’t make enough sales to pay your rent). 

While the majority of MSA is experiencing declining retail sales, San Marcos and Kyle posted positive gains of 2.7% and 25% this month respectively compared to February 2009.  The increase in San Marcos was the first in seven month.  Kyle’s significant increase is predominately due to the completion of the second phase of Kyle Crossing, 133,000 SF Target as well as smaller tenants including Sally Beauty Supply, Radio Shack, United Heritage Credit Union, Castle Dental, Seton Medical Clinic, and Kyle Family Medical clinic.  The entire shopping center consists of 925,000 SF of gross leasable area (GLA).   Therefore, Kyle’s increase in sales tax revenues is a poor indicator of the health of the retail sector there unless sales tax allocations are adjusted from an expected sales tax revenue benchmark to find out true performance.  The benchmark would be derived from the market.  Too bad the data isn’t reported that way publicly.