Online shopping partially to blame for Lufkin’s falling sales tax revenue

Online shopping partially to blame for Lufkin’s falling sales tax revenue

LUFKIN, Texas (KTRE) - The City of Lufkin is falling short in revenue planned for this budget cycle.

Lufkin City Manager Keith Wright said this is because of a decrease in local sales tax revenue.

The largest part of the city’s budget is from sales tax. They are about $110,000 below where they were at this time last year, which is negative three percent. Wright believes the decrease is due to online shopping.

“What happens when you purchase online, the city doesn’t receive that revenue,” Wright said. “So if it’s just one person or one sale it’s not a big deal, but when you add everybody up that’s buying online, it adds up to significant income that’s taken away from the city.”

Wright said that if people continue to purchase online, that may affect the existence of big box stores in Lufkin like Walmart, Target, and Academy.

“If it’s not meeting its sales quota they may close that box down and move it out of Lufkin,” said Wright. “And if they do, it not only affects the sales tax, it affects the property tax and it affect jobs of the people working there.”

He understands that certain items can only be purchased online and that's okay.

"If there's something that's comparable in cost, think about your local community,” he said. “Not only your city, but your county, and those stores and the people that are working in them. It's important."

They city never spends their full budget, so by the end of the year could have a couple of hundred thousand dollars because they saved it.

"If it keeps building then we're going to have to start looking at other things,” said Wright. “Whether we're going to cut back on some expenditures, not do exactly what we thought we were going to do this budget year. Just make modifications."

Wright said the city doesn’t receive as much sales tax from smaller local shops which appear to be having steady or higher sales.

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