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Will Falling Oil Prices Affect Metro’s Sales Tax Revenues?

Analysts reviewed past sales tax collections and they say the numbers are mixed.

Metro-light-rail-train-makes-a-stop-at-the-Downtown-Transit-Center.jpg
A Metro light rail train makes a stop at the Downtown Transit Center.

Metro gets much of its funding from a one-cent sales tax collected throughout its transit service area. The transit agency’s finance committee wants to know if those collections are expected to drop because of declining oil prices.

Metro Budget Director Philip Brenner ran the numbers, comparing sales tax revenues to oil prices over the past three decades. At Monday’s meeting, he told the committee what he found.

“We’re seeing things that are very much all over the place. You know, that’s not a technical term,” said Brenner.

Brenner said in most cases, sales tax revenues increased with the price of oil. But he also found that revenues were up in some years when oil prices decreased. In three years, oil prices were up and sales tax collections were down.

Five months into the current fiscal year, Brenner said oil prices don’t appear to have much of an effect.

“We’re still almost $28 million or 9.8% ahead of 2014,” said Brenner.

Brenner credits the strong growth to a more diversified economy. Metro board members will learn more when they get their mid-year budget update.

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Gail Delaughter

Gail Delaughter

Transportation Reporter

From early-morning interviews with commuters to walks through muddy construction sites, Gail covers all aspects of getting around Houston. That includes walking, driving, cycling, taking the bus, and occasionally flying. Before she became transportation reporter in 2011, Gail hosted weekend programs for Houston Public Media. She's also covered courts in...

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