A slowdown in the oil and gas industry caused Texas sales tax revenue to decline in June for the first time in more than five years.

Sales taxes — the state’s largest source of revenue — totaled $2.2 billion in June, down 1.4 percent from the same month last year. That’s the first year-over-year decline since April 2010, according to the Texas Comptroller’s office, when the state endured the final month of a precipitous sales tax drop in the wake of the recession.

In a statement, Comptroller Glenn Hegar attributed the dip to the downturn in the oil and gas industry. In the past year, a glut of oil in the world market sent prices tumbling, dealing a blow to oil and gas producers. In Texas, the number of oil rigs in operation declined from 889 a year ago to 363 last week, according to oil services provider Baker Hughes.

With production in decline, oil producers are buying less machinery, meaning less sales tax revenue for the state, economists said. Also, lower employment in the industry means fewer paychecks to spend on retail goods.

“We know that the oil and gas industry has declined sharply,” said Keith Phillips, an economist at the San Antonio branch of the Federal Reserve Bank of Dallas. “Those machinery sales obviously have plummeted. I think that has played a big part in this.”

The state’s 6.25 percent sales tax applies to nearly all purchased goods except those that are exempted, such as items used in manufacturing. It is separate from the state’s gas tax, which adds 20 cents to the cost of each gallon. In 2014, sales taxes provided about 53 percent of the state’s net revenue.

Hegar noted in his statement that sales tax receipts from the construction, information, restaurant and service industries are growing.

The decline “was expected,” Hegar said. In a report published in January, the Comptroller’s office predicted that low oil prices would dampen sales tax revenues “even as the broader economy continues to expand.”

The report noted that the oil and gas business has been shaking up sales tax revenues for years. Earlier this decade, revenues were “subject to erratic swings” due in part to the fracking boom, the report said.

This month, the state is returning $609.8 million in sales tax revenue to cities, counties and other tax districts — an increase of 1.2 percent from July of last year. It takes about two months for the state to return sales tax revenues, so the money being returned was collected in May.

Most of the state’s major cities will get larger sales tax returns in July than they did last year. San Antonio will get $23.6 million, up almost 2 percent from July 2014. For Austin, the return is 10 percent higher, and for Dallas, 5 percent.

The growth rate for San Antonio’s return has slowed in recent years. Between July 2013 and July 2014, its sales tax return increased 4.7 percent. Between those months of 2012 and 2013, it went up 17.2 percent.

The sales tax return this month is up only 0.4 percent for Houston, the state’s energy capital, and it’s down 2.4 percent in Fort Worth.

The July returns plummeted for many cities where the gas and oil industries have a large presence. In Midland, for example, the return declined 7.3 percent; in Odessa, 12.2 percent; and in Alice, 17 percent.

Several Eagle Ford towns bucked the trend, though. In Karnes City, sales tax returns were up 71 percent; in Kenedy, 34 percent; and in Cuero, 8 percent.

Despite the June decline, the state’s sales tax revenue is still up so far this year. In the first six months of 2015, the state collected $14.2 billion, up from $13.5 billion last year. In its January report, the Comptroller’s office forecast that sales tax collections would rise every year through at least 2017.

Economists struck a positive note about the state’s economy, saying there were signs things are turning around. Phillips noted that the number of statewide unemployment claims has declined over the course of the year. “It’s not going to be a quick bounce-back, but I think we’re close to bottom,” he said.

Steve Nivin, an assistant professor of economics at St. Mary’s University, said he’s seen hints that the oil and gas industry has adjusted to low oil prices.

“We’re already seeing some signs that the oil and gas industry has settled,” he said. “I expect next year things will probably pick up.”

rwebner@express-news.net

@rwebner