Published: September 11, 2008 11:16 pm         

Sales tax revenue continues to rise as Enid economy shows solid growth

Amid lots of gloom and doom talk about the nation’s economy, Enid seems to be doing just fine, at least for the last few fiscal quarters.

For the past three years, Enid sales tax collection figures show only three months when there was no gain over the same month the previous year. Retail figures, which include sales tax collections on everything except fuel, automotive and wholesale, show Enid with a 6.5 percent average gain in the first quarter this year over the same quarter of 2007. In the second quarter, figures show a 9.8 percent increase over the previous year, according to Oklahoma Tax Commission.

City Manager Eric Benson, who watches sales tax figures closely, said Enid is doing well.

“It’s all coalescing into a very attractive economy for Enid, and, theoretically, it can last as long as the consumer wishes to participate,” he said.

Benson called the good news in the midst of the national economic struggles “amazing.” He said consumers are adapting to the economy. When times are hard, people change their buying habits and manage their budgets better, he said, and in communities like Enid, with essentially full employment, people still are buying goods and services, which is reflected in the sales tax figures

In January 2007, sales tax was down 5.2 percent over January 2006, but February 2007 increased 17.5 percent over the same month the preceding year. Actual sales in December 2007 showed a robust 8.3 percent growth.

The first six months of 2008 have begun the same way, with consecutive increases in average sales tax collections during the first two quarters.

Fred Jungman, economics professor at Northwestern Oklahoma State University, said gains are to be expected during an oil boom.

“There’s a boom going on in Enid,” he said. “There’s lots of oil and gas drilling. I don’t know that we’ve benefited in Alva. Our economy doesn’t take an uptick like Enid.”

Jungman said the economic climate reminds him of the oil boom of the 1970s and ’80s. Nationally, retail sales are virtually flat, only 3 percent growth in some areas, while the Enid area is seeing an increase in sales. He said a good wheat crop this year also will help the economy.

“We’re lucky. It’s that way a lot of times. It was that way in the ’70s and ’80s. There was a recession nationally and we missed it,” he said.

Jon Blankenship, president of Greater Enid Chamber of Commerce, said the chamber receives sale tax collection figures, and he agreed they look good. The chamber publishes year-to-date figures in its newsletter, he said, and the August figures, which represent sales through June, showed $469,496,000 year-to-date. That figure represents an approximate 7 percent increase over the 2007 figure for the same time period of $437,518,000.

Ed Vineyard, vice president of Northern Oklahoma College Enid and also an economist, said the oil and gas boom is fueling people’s incomes. He talked with some former students recently who have oil field jobs and are doing well.

One concern he has is if inflation is running ahead of last year, there is the danger of declining value of retail sales. As prices rise, people may not receive the same value of goods for their money as they previously did, he said. Still, paying more for a product means paying more sales tax, he said.

Vineyard said Continental Resources, Advance Food Co. and similar firms in Enid have contributed to the sales tax.

“The reason sales tax is watched so closely is that consumer spending makes up 70 percent of the economy. The gross national product goes 70 percent to durables, non-durables and services,” he said.

When consumers spend more, stores have to hire more employees and order more products, which causes manufacturing firms to increase their number of employees and their consumption of raw materials. That also works in reverse, he said, if consumers stop spending.

“Oklahoma seems to be in the lead in the nation, and a lot of that is due to oil and gas,” he said.