02-25-19 Regular Meeting of the La Porte City Council

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REQUEST FOR CITY COUNCIL AGENDA ITEM February 25, 2019 Appropriation Agenda Date Requested Jason Weeks, Asst. City Manager Source of Funds: N/A Requested By: CMO Account Number: N/A Department: Amount Budgeted: N/A Report Resolution: X Ordinance: Amount Requested: N/A Exhibit: Impact of HB 86R-3348, HB #1192 & Calculation of Budgeted Item: YES NO Total Impact by Lewis McLain and Resolution in Support SUMMARY & RECOMMENDATION Representative Edward Thompson of Brazoria has filed a bill that provides equity for collection of sales tax by the State of Texas. The current scheme is that 2% of sales tax collections are retained by the State for administration of the State Comptroller of Public Accounts agency. The State Comptroller does a great job collecting and providing a wide variety of services, but the 2% across the great State of Texas amounts to nearly $188 million per year to the State, far in excess of the cost of providing those services. Local government finance and Microsoft Excel guru Lewis McLain has been highlighting the topic at https://citybaseblog.net/2018/09/30/a-huge-local-government-expense-not-being-disclosed/ This bill would reduce the fee the State Comptroller charges local governments for sales tax collection. The reduction of 1% would mean that well over $93 million more would go back to local governments, of which La Porte would receive over $121,000 annually in additional sales tax collections. In 2018, the State Comptroller had a budget of $356.7 million, which was used to perform a multitude of services by collecting fees from 425 types of revenue sources. The two largest revenue collections come from federal government payments and sales tax. Though there is no direct correlation with the $356.7 million collected and the work involved, it can be said that there is a general correlation. Why does an appraisal district offer to do your property tax billing as such a reasonable cost? Because they are sending out bills for the one or more portion of sales tax (6.25%), then how much additional work is there to collect the local governments portion (up to 2%)? As from local entities budget. This has caused local entities and legislators such as Representative Thompson to question just how much time and effort is really spent by the State Comptroller for collecting (including the field audits, etc.) sales tax in total? At least a reduction of 1% charge to local entities for collecting their sales tax is a reasonable request. Attached is a resolution supporting this legislation. If adopted, this resolution will be sent to all elected officials representing the City of La Porte. Action Required by Council: