MIDLAND, Texas — Both Midland and Odessa have seen increases in sales tax revenue, and while some of that is because of inflation a lot of it is from the local job market and the oil and gas industry.
"The most important factor of our economic activity is when we have a good strong rig count, then the sales tax will always be higher because we have high employment and very good wages out here," said local economist Mickey Cargile with Cargile Investment Management.
The rig count is an indicator of how the oil and gas industry is doing.
"I don't expect it to increase much more from this point, but we're at a very good place right now, somewhere around 350 rigs. I don't look at next year to have the kind of growth we've had this past year, but I do expect it to be stable," said Cargile.
This year the sales tax revenue has grown about 31% in Odessa and about 46% in Midland.
"There is an inflation component in it so inflation locally is probably about somewhere in the 12% area so some of the increase is simply the price of things is higher, the sales tax is based on the price," said Cargile.
Inflation is only part of it: our area brings in a lot of jobs, and good paying ones at that.
"Our average wage here is the highest in the nation, and so that is what's really driving, it's not only the highest, it's the highest by almost 100%, it's almost double what the second highest wage is," said Cargile.
Because of the importance of the oil and gas industry, the Permian Basin will be holding strong for the foreseeable future.
"Right now for where we are in the economic cycle, with the rest of the country to go into a recession if it hasn't already, I think we'll be somewhat immune," said Cargile.