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<br />Sales Tax Close Up.
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<br />Year after year, many Texas cities find maintaining and repairing city streets an
<br />ever-growing expense. Recognizing this, the 2001 Legislature added Chapter 327
<br />to the Texas Tax Code, allowing cities to adopt a dedicated local sales tax for street
<br />maintenance and repair at a rate of up to 0.25 percent.
<br />
<br />In the three and a half years
<br />since Chapter 327 became law,
<br />III Texas cities have adopted
<br />this form of local sales tax.
<br />Since becoming law, the tax
<br />has been the most popular
<br />form of additional local sales
<br />tax, adopted by more cities
<br />than any other tax.
<br />
<br />Dwindling funds
<br />
<br />All cities in Texas are eligi-
<br />. '~ for the street maintenance
<br />.es tax, as long as the over-
<br />all local sales tax rate does
<br />not exceed 2 percent. Voters
<br />must approve the sales tax for
<br />street maintenance.
<br />The adopted tax is effective
<br />for four years, after which time
<br />it either expires or is renewed
<br />through another election.
<br />Danny Valenzuela, city man-
<br />ager of Fort Stockton, said a
<br />lack of funding that resulted in
<br />19 years of neglect to the city's
<br />streets prompted the West
<br />Texas city to seek voter ap-
<br />proval to adopt the street main-
<br />tenance sales tax in May 2002.
<br />"The city's streets were in ill
<br />repair, and something had to
<br />be done," said Valenzuela. "This
<br />past year, the city developed
<br />_ an eight-year plan to patch
<br />and seal coat all streets within
<br />the city, starting with those in
<br />most danger of collapse."
<br />Valenzuela said the tax
<br />also provided much needed
<br />revenue to repair damage to
<br />',eets caused by flooding
<br />Jm a record rainfall in 2004.
<br />Haltom City, just north of
<br />Fort Worth, adopted the tax in
<br />November 2001.
<br />"Haltom City is about 55
<br />
<br />years old, and we needed to
<br />reconstruct and overlay a num-
<br />ber of streets throughout the
<br />city,. said David Fain, director
<br />of public works for the city.
<br />Haltom City is undertaking a
<br />capital improvement program
<br />and has budgeted $2.2 million
<br />for street reconstruction in
<br />2005, Fain said
<br />"This year's allocation of
<br />street maintenance sales tax
<br />should generate enough rev-
<br />enue to cover over one-third
<br />of that obligation," he said
<br />Christopher Boone, the
<br />public works director for West
<br />Orange in East Texas, credited
<br />the tax with his city's street
<br />improvements. When voters
<br />passed the tax, the city council
<br />approved a four-year plan for
<br />street improvements, he said.
<br />The tax provided revenue
<br />needed to make lasting repairs
<br />rather than continuing the
<br />practice of just keeping things
<br />patched together, Boone said.
<br />Roy McDonald, mayor of
<br />West Orange, said the tax is a
<br />great source of revenue.
<br />"Our people like it,. McDon-
<br />ald said. "We've been able to
<br />do things we would not have
<br />been able to do, and the tax has
<br />freed up other funds within the
<br />city's budget, allowing us to
<br />fund other needed projects."
<br />McDonald said using a sales
<br />tax for street maintenance
<br />versus property taxes eases
<br />the burden on residents by
<br />placing it on everyone who
<br />drives on the city streets.
<br />
<br />Eye on the future
<br />McDonald would like to see
<br />
<br />the Legislature make the tax
<br />permanent instead of having it
<br />expire after four years.
<br />Bennett Sandlin, general
<br />counsel for the Texas Munici-
<br />pal League (TML), said mak-
<br />ing the tax permanent would
<br />help cities.
<br />"TML supports the idea
<br />of giving voters an 'opt out'
<br />provision for the street sales
<br />tax rather than just having it
<br />expire after four years," Sand-
<br />lin said "That would make it
<br />consistent with the way most
<br />other city sales taxes are struc-
<br />tured, and making this needed
<br />change to the street sales tax
<br />would also enhance a city's
<br />ability for future planning."
<br />More information on the
<br />sales tax for street main-
<br />tenance may be found at:
<br /><www.window.state.tx.us/
<br />19a1streetmtnc.html>. ....
<br />
<br />The city's
<br />streets were in
<br />iU repair, and
<br />something had
<br />to be done.
<br />
<br />Bob Bearden
<br />
<br />Big and small repairs
<br />
<br />Only cities are eligible to adopt the street maintenance sales
<br />tax enacted by the 2001 Legislature. Since 2002, cities as
<br />small as the town of Anderson, with a population of 257, or
<br />those as large as Arlington, with a population of 332,969,
<br />have adopted the tax.
<br />
<br />m
<br />
<br />il/I Number of cities II'
<br />I I Ii that adopted the tax . . .:.
<br />I 1,/ 2002 2003 2004 2005
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<br />Window on Texas Local (Jovsrnnumi. April 2005 5
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