R-2004-08 oppose school finance or tax system reforms

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. . REQUEST FOR CITY COUNCIL AGENDA ITEM FiAllac:e ADDroDriation Agenda Date Requested: Requested By: Source of Funds: N/A Department: Account Number: N/A Report: Resolution: XX Ordinance: Amount Budgeted: N/A Exhibits: Amount Requested: N'A. Exhibits: Budgeted Item: YES NO Exhibits: SUMMARY & RECOMMENDATION - School finance reform poses serious threats to city tinances. In August 2003 the Texas Municipal League (TML) appointed a Task Force to study the impact of school Finance reform on Texas cities. Since that time, we have provided you with information substantiating our concerns regarding the impact on municipal revenues, specifically as it relates to the City of La Porte. Governor Rick Perry is expected to call a special session of the Texas Legislature next month to address the state funding formula for schools. The primary way in which possible reform scenarios could hurt cities is by taking revenue from property or sales taxes and diverting it to schools. We are especially vulnerable, since 71 % of our revenues are derived from this combined stream, compared to 56% for the average Texas City. To the extent adverse actions are taken to this revenue stream, we would have an additional exposure of 15%. In the area of Economic Development, these type actions could cripple economic expansion efforts. When sales taxes go down, so do Section 4B Sales taxes, and our associated opportunities to attract new businesses. The Resolution that we are asking you to pass opposes any system reforms that would negatively affect city revenues and Economic Development efforts, Action Required bv Council: Adopt/approve resolution opposing any School Finance or Tax System Reforms that would negatively affect City Revenues and Economic Development efforts. 3-; ft; -oV Date