Senator Eliot Shapleigh - El Paso, Texas

Texas' sales tax collections in April dipped nearly 2 percent compared with the same month last year, the first monthly decline since 2003, according to a report that the state comptroller released Friday.

State officials, who closely watch the sales tax because it constitutes more than half the state's general revenue, cautioned against reading too much gloom into the returns for one month.

Sales tax collection for the fiscal year is up 6 percent and is exceeding the 3 percent growth that was projected in the budget.

And the double-digit sales tax growth of the past couple years was bound to temper, they said.

Collections in April, which largely reflect sales in March, were $1.7 billion compared with $1.74 billion last year. Compared with a month earlier, the April numbers were up, as was the pattern last year.

"The economy is growing, but it is slower growth," said R.J. DeSilva, spokesman for Comptroller Susan Combs. "Slower growth as opposed to a decline in growth."

Terry Clower, associate director of the Center for Economic Development and Research at the University of North Texas, said consumers might be spending less on taxable items as nontaxable items cost more.

"Because of the inflation in food prices and, of course, inflation in gas prices, what we might be seeing is a bit of evidence of a shift in spending patterns," Clower said.

In March, Combs said the state has largely avoided national economic woes because of a diverse economy, strong oil and gas industries, and a low unemployment rate.

Locally, Austin and Round Rock continued to see substantial decreases in their sales tax collections, according to the monthly report.

Austin's sales tax revenue dropped 5.1 percent compared with the same month last year.

The city had planned on a 7.6 percent increase in sales tax revenue when they approved this year's budget, but so far, revenue has only increased 2.1 percent. If that trend holds, the city could be short $8.5 million by the end of the fiscal year.

Chief Financial Officer Leslie Browder sent an e-mail to council members Friday saying that the city would continue asking department directors to find places to save. The city has also slowed hiring since March.

Round Rock, which has been trying to diversify its sales tax base to take in more money from sources other than Dell Inc., was down 11.2 percent for the month, the second straight month of declines.

Sales tax revenue from Dell was down 15 percent and 8.6 percent from all other sources, Round Rock Finance Director Cindy Demers said.

The city will hold off on hiring some people for the rest of the year, Demers said.

Other cities in Central Texas, including Kyle and Cedar Park, saw increases in sales tax revenue, at least in part because of new retail developments.

The state's negative monthly report did not dampen the recent enthusiasm about the state surplus.

House Speaker Tom Craddick, R-Midland, has predicted the surplus could be as high as $15 billion, which exceeds the comptroller's surplus estimate of $10.7 billion, based on the state's strong economy.

Craddick spokeswoman Alexis DeLee said the April collections were just one month out of a two-year budget cycle, so it is too early to say what it means.

Texas continues to enjoy a robust and growing economy that has led to the surplus, said Allison Castle, a spokeswoman for Gov. Rick Perry. The governor would like to tap some of that surplus for tax cuts or rebates, which would require a constitutional amendment.

"By returning some of those dollars to Texans, we are turning the engine of economic prosperity," Castle said.