Beeville voters to decide if sales tax is used for street repairs
By GARY KENT
Bee-Picayune staff
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Posted Saturday, Aug. 2, 2008 – It appears likely that Beeville voters will have a chance to decide whether or not they want to take part of the 4B sales tax now used for economic development and put that money in a street maintenance fund that will allow the city to better maintain streets.
City Manager Ford Patton explained that possibility to the council at Tuesday evening’s meeting saying councilmen could call an election and give voters a chance to change the way the half-cent special use sales tax is used in the next four years.
Currently all that money, about $850,000, goes into the city’s 4B sales tax fund and the Beeville Economic Improvement Corporation hears requests for grants from the fund and makes recommendations to the City Council on how to spend it.
Patton first brought up the possible change during the council’s first meeting in July and Mayor Kenneth Chesshir asked that a discussion of the issue be put on the agenda for this week’s meeting.
“The money is there and this is a good way to use it,” Chesshir said. By designating a portion of the approximately $850,000 a year the city collects through its half-cent special use sales tax to seal coat streets, the city can begin restoring the condition of the 1,140 blocks of paved streets.
Patton said businesses in the city now collect a sales tax of 8.25 percent, the maximum allowed by law. Of that, 6.25 percent goes to the state, 1 percent goes into the general fund, 0.5 percent goes to Bee County to reduce property tax rates and another half a percent goes into the 4B fund.
If the city decides to use a portion of that maximum sales tax for any other purpose than the ones in effect now, it must reduce the tax somewhere else.
Patton said the city could take one eighth of the four eighths that now goes into the 4B fund and set it aside for street maintenance. That would give Beeville about $212,500 each year that could be used to seal coat and maintain city streets and to even purchase equipment that would be used for that maintenance.
That would leave about $637,500 a year for economic development.
Patton had used street maintenance as the primary tool for selling the tax to city residents back in 1996, when the voters were first allowed to decide whether or not they wanted to approve the tax.
However, the regulations for the use of 4B sales taxes have been amended to the point that cities are no longer able to legally use that money for projects like street maintenance.
Patton said that could change if voters favor reducing the amount that goes into the 4B fund and put that amount into a street maintenance fund.
The city manager said the council could either call for an election on the issue for the next regular election date, on Nov. 4, or for the second Saturday in May, when City Council elections are held.
He also said that changes in special use sales taxes must be “renewed” ever four years by the voters.
Patton proposed that the matter be brought up for a vote in May of 2012, making it one of the issues that voters may decide every four years during regular city elections.
Each year that the issue is decided by voters, the city could alter the number of streets on its list or it could change the percentage of the special use sales tax to be used for street maintenance.
Patton said streets need to be seal coated every 10-12 years for proper maintenance and that means the city needs to include about 100 blocks of streets each year on its seal coating list. This year the city was only able to put about 40 blocks on that list.
“We need to generate $250,000 a year, closer to $300,000 a year for seal coating and that doesn’t include other street maintenance needs,” Patton said. “I think it would be something very good for the City Council to give some serious thought to.”
The benefits, Patton said, would be that the city could fund a seal coating program at no additional cost to property tax payers, it would not affect the general fund and the change in the way special use taxes are distributed would still leave ample funding for economic development through the 4B sales tax fund.
The last time the city funded a major seal coating project without taking advantage of money either in the general fund or from special use sales taxes was in 1990, Patton pointed out. That year the city sold bonds to finance seal coating on 900 blocks of city streets. And the city is still paying on those bonds.
“I’m for it,” Chesshir said. “If people are informed, I can’t see anybody voting against it. I’d like to do it on the November ballot.”
Mayor Pro Tem John Fulghum agreed. “What’s the next step?” he asked.
Councilman David Carabajal also expressed interest in the change, noting that there would still be plenty of money for the Beeville Economic Improvement Corporation to recommend for economic development.
“I’m all for it,” said Councilman Jimbo Martinez. “I’m glad we’re taking this up.”
Martinez said he had discussed the possibility with Patton about a year ago after learning that legislation would allow the city to give voters the opportunity to make such a decision.
It was Martinez who reminded fellow councilmen that the change must be renewed by voters every four years.
After briefly discussing the amount of money that would be needed for a proper seal coating program, Carabajal recommended that the council consider allowing the voters to consider putting two-eighths of the half-cent tax toward street maintenance. Then, Carabajal said, if after four years there is more money available from the half-cent tax the percentage set aside for street maintenance could be reduced by the voters.
“I’m all four getting the streets fixed,” said councilman Mike Scotten. “I’m all for the one-eighth but not for the one-quarter. We’ll end up hurting ourselves in the long run.
“Let’s take a step back,” Carabajal said. Reducing the amount of money going into the city’s 4B fund would still provide more than $400,000 for economic development.
Carabajal said that also would free up some of the money now put into the city’s general fund each year and enable the city to offer assistance to business through a “380 grant program” authorized by the state.
“I don’t want to stiff economic development,” Carabajal said. “Maybe we need to review the 380 program.”
Scotten said he wanted “the record to reflect that I’m all for the one-eighth.”
Patton said he could bring a draft ordinance to the council at its Aug. 12 meeting giving the council enough time to call an election on the matter for Nov. 4.
City Secretary Tomas P. Saenz said the ordinance will have to include the exact wording that will be reflected on a ballot.
Carabajal then asked Patton to bring some information on the state’s 380 grant program and Patton said he would.
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