SALES TAX REFLECTS retail activity After dropping in 2020 during the height of the COVID-19 shutdowns, sales tax revenue has been higher than projected in The Woodlands Township’s 2022 budget. While revenue comes from many sources, more than 50% is from retail activity.
Strains on labor in Texas During the rst year of the pandemic, food service employment decreased in Texas. Restaurants have cited demands for higher salaries as a challenge in nding labor.
The Woodlands Township sales tax revenue
Projected sales tax revenue in The Woodlands (2022)
Miscellaneous 9%
Retail 52.8%
$60M $50M $40M $30M $20M $10M $0
Entertainment 2.3%
Professional services 5.1% Wholesale trade 4.9% Information 7.7% Manufacturing 6.1%
FOOD SERVICE INDUSTRY LABOR IN TEXAS 2020 25%
Average annual wages $20,312 Average Texas wages $57,382
$13.06M year to date $2.42M Over budget
+21.1%
20%
15%
$10.64M Budgeted YTD
0% 10%
Accommodation & food services 12.1%
2017 2018 2019 2020 2021 2022
-10%
SOURCE: THE WOODLANDS TOWNSHIP COMMUNITY IMPACT NEWSPAPER
-20% -15%
of the rst quarter of the year, accord- ing to township records. In the s- cal year 2022 budget, running from January to December, The Woodlands Township estimated 52.8% of sales tax would come from retail trade, and the next-highest category was from accommodation and food services, making up 12.1% of the total. A total of 64.9% of sales tax revenue in The Woodlands is projected to come from retail and food services, both found in Market Street. Bruce Rieser, the chair of the Visit The Woodlands board, which is the township’s convention and visitors bureau, said retail is a large piece of the township’s appeal to visitors, and commerce is growing alongside a general return to travel as disruption from the pandemic recedes. “This is the inevitable next stage after COVID and the lack of travel during that particular period,” he said. “It’s obvious that travel, especially fromMexico and Central America, has increased over the last nine months now, so it’s really having an impact.” Sales tax revenue does not come
Woodlands Area Chamber of Com- merce, said he believes the issues Mar- ket Street has seen with businesses closing are widespread in the retail industry since the pandemic started. “The biggest challenge are labor and supply chain, and then you roll in in ation on top of that, … it drives up your cost,” he said. “Hopefully this wave of in ation ends as people get back to work. … We still have that COVID hangover. [It will be] a rough few months.” Gonzalez said sta ng has been the most consistent challenge for busi- nesses, particularly restaurants. “The biggest challenge we had, … even to this day, is still sta ng,” Gonza- lez said. “It’s just changed … the whole workforce, the demands of employees, salary rates [and] hourly rates.” Across Texas, restaurant and bar employment dropped by about 13% from 2019-20, and the average annual salary among employees in the food services profession was $20,312 as of 2020, according to the Texas comp- troller’s o ce. In Texas, the average annual salary statewide was $57,382
entirely from local retail sales, how- ever, especially since local juris- dictions now collect sales tax from internet sales since a U.S. Supreme Court decision went into e ect Oct. 1, 2019. This allows internet sales tax revenue from major online mar- ketplaces to go to local jurisdictions. “Market Street and [The Wood- lands] Mall are both doing quite well and performing very well in compar- ison to their competitors, but there’s a huge impact from the change in the internet sales collection that is driv- ing a lot of this [sales tax increase] as well,” Rieser said. Although The Woodlands has seen an uptick in sales tax revenue as well as retail occupancy, it is not alone in the region, Gaines said. “This is not unique to The Wood- lands,” Gaines said. “Just about all ‘hands of the clock’ around the Hous- ton area are experiencing population growth, [and] demands for goods and services are rising.” Labor challenges JJ Hollie, president and CEO of The
-13.2%
Overall food supply chain employment 1.47 million Food services employment 966,782
SOURCE: TEXAS COMPTROLLER’S OFFICE COMMUNITY IMPACT NEWSPAPER
as of the fourth quarter of 2018, the most recent information available, according to the comptroller’s o ce. Despite the strain on workers, Gaines said in ation does not present as much of an obstacle in retail leasing as other economic factors do. “Retail leasing and occupancy should not have a huge issue with rising in ation,” Gaines said. “That will a ect the market for sale of property. ... If a deal in The Wood- lands doesn’t sell, send it my way. … All of my clients are interested.” Ally Bolender contributed to this report.
For more information, visit communityimpact.com .
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THE WOODLANDS EDITION • MAY 2022
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