Sam Houston Tea Party Question, Propositon B
Question:
As you know, there will be a separate Proposition on the ballot
that, if approved, would allow the City to create a separate
Economic Development Corporation and to fund that corporation
with property tax money ($625,000 in the first year, likely more
each year after that). This money would normally go to the City's
General Fund that pays for most essential city services (e.g., Fire,
Police, Streets, Roads, Sidewalks, Drainage, Parks, Facilities
Maintenance, Operations).
A) Are you in favor of this proposition and why or why not?
B) If this proposition is approved, how would you propose to
replace the tax money lost to the General Fund? Would you vote to
levy higher property taxes or would you prefer to lower the quality
of the services provided for by the General Fund?
Reduced to a simpler form the Proposition might have been more
clearly worded:
"Shall the City of Huntsville be allowed to spend up to $625,000 a
year or more of property tax money for the indefinite future and
possibly incur millions in new debt payable by property taxes on
economic development projects that have not yet been defined
and will not be referred to the voters for prior approval?"
Note: A $625,000 Property tax increase is equivalent to about a
10% property tax increase/year for the individual taxpayer.
ANDY BRUNINGER
I am not in favor of the 4B Economic Development Proposal and I voted
against placing this proposal on the November ballot at the city council
meeting. I am against this proposal for the following reasons:
1. The $625,000 estimated revenue for this proposal will come from the
1/2% of the sales tax that the citizens voted to go towards property tax
relief. This $625,000 is estimated to be 1/8 of the 1/2% of the property
tax relief portion of the sales tax. Why take this money from property tax
relief that is a direct benefit to the citizens.
2. Removing $625,000 from the city budget will leave less money for the
city to operate and according to the city manager, the only way to cover
this loss in revenue without raising the tax rate is to reduce employees.
Now, one can argue that perhaps the city can survive with less employees
but what I find such a paradox is that Economic Development is supposed
to create jobs, yet this proposal could actually result in the elimination of
jobs.
3. The 4B Economic Development board that would be set up to govern
the4B and the city council will review each money request for 4B
spending, however the 4B allows the board and council to spend this
money on parks, landscaping, water lines, etc. as long as they can tie the
expenditure to some justification of Economic Development.
Can you imagine the arguments and waste of time involved in
members of the 4B board or city council trying to convince
each other why we should spend 4B money on parks or
landscaping? The city should debate parks and landscaping
expenses without any 4B involvement.
4. No one to date has submitted a plan as to how this 4B
would operate. What are the rules; does the city have to hire
a staff; can you limit the spending; who selects the board
members. . . There are a myriad of questions that are
unanswered. It appears to me that the idea is, just get the
voters to approve the $625,000 and then we will figure out
what the management plan and rules will be. Government is
historically bad at managing these endeavors.
5. Since this 4B is only authorized by a vote of the citizens, it
can only be unwound by a vote of the citizens. Once and if it
is approved, and it fails to produce as intended, it is difficult
to unwind and will take another ballot proposal to eliminate
it.
6. The 4B will have the authority to borrow money and
obligate the city. Very bad idea!
7. Sales tax is the only real potential for strong revenue
growth in the city. Why would we want to encumber this
revenue source with a 4B proposal?
8. If the city wants to fund Economic Development there are
other ways to do it without forming a 4B.
If this proposition is approved, how would you propose to
replace the tax money lost to the General Fund? Would you
vote to levy higher property taxes or would you prefer to
lower the quality of the services provided for by the General
Fund?
Those who favor the 4B will advise that with all the new
business that will be created by the 4B Economic
Development Corporation, the revenue will replace itself with
new business. This may be true however, I believe we can still
have the new business without the 4B proposal. The reality is
that the only way to replace the money lost to the general
fund is a tax rate increase or a reduction in services. I am not
in favor of a tax rate increase or a reduction in services. My
proposal is to go to a private company for Economic
Development and have the expense funded by all the entities
that benefit from Economic Development. The city, county,
SHSU, and the hospital district all benefit from Economic
Development and should have "skin in the game." By doing
this, the city does not go it alone and all entities fund the
endeavor because they will all benefit. It will also drastically
reduce the contribution by the city and we can make the city's
contribution a budget item.