City sales tax revenues rising, Garcia tells council

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COTULLA’S NEW FINANCE DIRECTOR TOUTS BUSINESS, HOTEL TAXES EXCEEDING PRE-PANDEMIC LEVELS

In his first presentation to the Cotulla City Council as the new finance director, Ernesto Garcia showed last week that the local economy is blossoming at a time when many view it as emerging slowly from a pandemic-related downturn.

Taking the position formerly held by Jorge Flores, Garcia makes his presentations to the council based on data gathered via a new bookkeeping software system installed at City Hall during Flores’ final months on the job. Detailed analyses of the city’s various departments and the progress on their revenues and expenditures are made more accessible and help outline where City Hall can expect gains and losses.

The greatest gain of the past month, according to Garcia on Thursday evening, February 9, is seen in the city’s sales tax collections, where a fund injection of more than $206,000 was recorded this month alone, reflecting business of the previous month.

For the current budget period that began last fall, Cotulla City Hall has taken in over $960,000, representing business between October and February. That tally, according to Garcia’s overview, shows that Cotulla has collected at least 38 percent more sales taxes than the same period the previous year.

Before leaving his position with the city, Flores repeatedly told councilors in late 2022 and in January this year that he sees the city’s economic recovery as now exceeding pre-pandemic levels.

The city also collects hotel occupancy taxes (HOT), which come from a surcharge attached to every hotel and motel room booked at properties inside city limits. Since the beginning of the energy industry exploration over the Eagle Ford Shale in 2008, developers have built more than 20 hotels in the city. Others lie outside city limits but within the municipal jurisdictional boundary.

Revenues from the hotel tax can only be used by the city to promote events or develop facilities that boost the economy, notably tourism. Among the big-ticket items supported by Cotulla with its HOT funds in recent years have been the commission of bronzes and parks beautification, historic preservation and refurbishment of downtown buildings  – including conversion of an old service garage to the new City Hall – a million-dollar rescue and preservation of the former Stockmens National Bank on Front Street, and financial support of major events such as the annual Wild Hog Cook-Off and Independence Day festivities that attract visitors. In turn, those expenditures are expected to fuel the local economy by increasing retail sales, employment, tourism and downtown activity at businesses.

So far in February, Garcia said, the city has collected $59,000 in hotel taxes. For the month of January, he added, Cotulla collected a near record-breaking $192,000.

In his last presentation to the council in January, Flores indicated that City Hall may expect to see HOT revenues close to one and a half million dollars by the end of the current budget cycle. Those numbers likewise reflect greater business activity than before the coronavirus pandemic, he said last month.

“We are in very good shape, financially,” Garcia said after last week’s city council meeting. “We can track our expenses accurately – such as in this example, where we bought a new service vehicle – and we can see more clearly where we are making the greatest gains, thanks to this new software.”