Growth in Sales Tax Slows Across Region

Halfway through 2026, the financial prospects of Texas cities and counties isn’t looking too good.

For the most part, local sales tax revenue has barely wiggled the first half of the year from the same time period a year ago.

For the seven towns in Fayette County, four have received a bit more revenue through June, while three are down.

Among the 18 other area towns tracked by the Record, 10 have gains while eight have losses.

Nationally, the war in Iran is being blamed for the overall economic slowdown, but those effects may not yet be showing up in the sales tax numbers. Generally, sales made in April are reported by merchants to the state in May and then rebates are sent to the cities and counties in June. This means revenue figures are about two months behind the actual sales.

While a few places are seeing very large gains and a few others big losses, most of the changes are modest.

La Grange, so far this year, has received just over $1.4 million in sales tax rebates from the State Comptroller’s office. That’s up 2.0% from the same period last year.

Schulenburg is the county’s second largest retail center. It has received just over $700,000, a 5.5% increase from a year ago.

Round Top has moved solidly into third place, with more than $320,000. That’s up 6.7% from last year, the largest increase in the county. Flatonia edged above the quartermillion- dollar mark, which was a 2.0% gain.

Carmine, Fayetteville and Ellinger are all down for 2026. Ellinger has dipped 3.2% and Carmine 5.6%.

Fayetteville is down the most, but Mayor Mike Stroup points out that this is the result of an adjustment in payments being made by the State Comptroller.

Apparently a taxpayer last year, when reporting where its sales were made, incorrectly attributed a large amount of sales to Fayetteville. According to Stroup, the Comptroller is now reducing rebates until the overpayment to Fayetteville is corrected. As a result, the comparison between this year’s reduced payments and last year’s excessive payments looms large.

Actual revenue to Fayetteville this year amounts to $63,412. That’s a 25.6% drop from last year’s payments, but it’s about in line with Fayetteville’s 2024 sales tax receipts. Once the overpayment from last year is corrected, the town’s revenue should grow again, Stroup believes.

Just who made the mistake isn’t known since the state considers sales tax reports as confidential information.

Meanwhile another area town is seeing a huge increase in sales tax revenue.

Sealy has received over $3.5 million so far this year, up 79.9% from last year, when it was less than $2 million at this point. Again, just who is responsible for the increase isn’t revealed by the state.

Nine area counties also levy the optional local sales tax. Among them, Bastrop County has seen its revenue soar.

While the town of Bastrop is up 9.9%, Bastrop County is up 35.4% so far this year. Much of the county’s population and industrial development is outside the Bastrop city limits. Many look to Elon Musk as the reason for much of the change.

His first big investment came in July 2021, when he bought 73 acres of land in Bastrop County for The Boring Company. In 2023, SpaceX opened its nearby Starlink factory. In September 2024, Musk moved the legal headquarters for X, the social media platform, from San Francisco to Bastrop County.

According to the U.S. Census Bureau, the July 2025 population of Bastrop County was 118,908, compared to 74,171 in 2010. Fayette County, by comparison, was 25,459 in 2025, the Census Bureau says.

So far this year, Bastrop County has received $6.3 million in sales tax revenue, compared to $4.7 million last year.

Fayette County is down slightly from last year’s pace. So far this year, it has received $1.7 million from the Comptroller, 3.1% less than in 2025.