Glenn Hegar, the thirtysixth person to hold the position of State Comptroller of Texas, was the guest speaker for a group of about 50 men and women at the Star Republican Women’s meeting January 19, 2021.
Hegar, as the Chief Financial Officer (CFO) of the ninth largest economy in the world, made a very informative and entertaining presentation.
Hegar shared several of the interesting facts from the many statistics that his office collects to determine the economic health of the economy in Texas. One of those was about the number of people who fly on airplanes every day. Before the pandemic, 2.3 million people on any given day were flying. That number was down to 90,000 per day at the peak of the pandemic. During the holidays, from Thanksgiving through New Years, the average was back up to an average of 250,000 per day, but still fluctuating.
In Texas, sales tax is about 60 percent of all taxes collected. As would be expected, sales tax receipts drastically dropped from the middle of March through the peak of the shutdown due to the pandemic. An unexpected boost to the revenue stream of sales tax occurred as a result of legislation passed in the last Legislative session, allowing collection of sales tax on internet purchases.
During the shutdown, internet sales soared. Mr. Hegar reported that in July, due to home improvement projects, purchase of workout equipment, and anything related to at-home activities, the sales tax collection (which reflects sales made in June) including internet sales tax peaked at $1.3 billion dollars. Another fact he shared was that, while mixed drink and beverage tax from bars and restaurants was obviously down during the shutdown, sales tax from liquor store purchases was way up.
Potential good news that the Comptroller shared was regarding the Economic Stabilization Fund, or what’s often referred to as the “Rainy Day Fund.”
he Comptroller’s office is anticipating that the Legislature won’t have to touch this fund, despite the fact that the economy in Texas experienced a crash in oil prices, lower sales tax receipts, and businesses being closed or restricted due to the pandemic the last 10 months of 2020. His prediction is that, in the next two years, this fund designed for emergencies will grow to $11million.
Another statistic Mr. Hegar revealed is that every day another 1,000 people move to Texas from another state. Despite this influx and the many companies moving headquarters and production sites to Texas, the impact on the economy of the world’s ninth-largest economy is barely a blip on the screen.