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Plan to get sales tax income spending on track

By DAVID TEWES
Nov. 4, 2010 at 6:04 a.m.
Updated Nov. 5, 2010 at 6:05 a.m.

Gabriel SolizGoes with Dt_CouncilFilings_031009

Sales tax board membersCity council members are Mayor Will Armstrong and council members Joe Truman and Gabriel Soliz.

Non-council members are Bob Martin, Jan Scott, Lewis Neitsch and Louise Hull Patillo.

Dale Fowler, with the Victoria Economic Development Corp., is a non-voting, ex-officio member.

A city official said he's hoping to get Victoria back on track when it comes to spending money produced by the half-cent sales tax.

Council member Gabriel Soliz said the city creates historic districts to celebrate the past and approves tax abatements for the future.

But he said the city also needs to focus on current problems, such as streets and drainage.

"We have to strike a balance." he said. "We're not doing anything for the present."

That's why he's proposing creating a committee composed of everyday people who would tell the city how they think the sales tax money should be spent. He said these would be people on the front line in neighborhoods that need improved infrastructure.

A board appointed by the city council is currently charged with selecting projects to be paid for with income from the half-cent sales tax. The tax was approved by voters in November 1995.

That board includes three council members and four non-council members. The projects they select must then be approved by the city council.

Voters were told a majority of the sales tax money would be spent on such improvements as streets and drainage, although some could be used for economic development.

The recently approved $7.49 million sales tax budget allocates about $2.85 million, or 38 percent, for economic development. The balance will pay for such things as the downtown utility replacement project, downtown street improvements, ramps accessible to the handicapped and debt service for the Youth Sports Complex.

"To be perfectly honest, I think there is an emphasis right now to assure the future of industry in Victoria," said Soliz, who also serves on the sales tax board. "I'm really not 100 percent comfortable with it, but I understand where the intent is."

Lewis Neitsch, who heads the sales tax board, agreed that the 2010-11 sales tax budget puts more emphasis on economic development than in the past.

But he said he believes it's a temporary trend because of such recent announcements as Caterpillar plans to build a manufacturing plant in Victoria.

Information from the city finance department shows that the sales tax board has approved $37.78 million for streets and traffic signals since the tax was first assessed in 1996. That's about 44.5 percent of the income it has produced.

Another $16.79 million (19.8 percent) has gone to utility projects and $9.41 million, (11.1 percent) has gone to drainage work.

Economic development projects have been allocated $4.1 million (4.9 percent) and Victoria Economic Development Corp. programs have been allocated $2 million (2.4 percent).

Neitsch said the sales tax corporation is a separate entity from the city and he'd like to see it change the way it has been deciding to spend the sales tax money.

He said the city has been telling the sales tax board it appoints how it wants the money spent. "My personal feeling is we're a piggy bank for the city."

Neitsch said he'd like to see the sales tax board be more independent when it decides how to allocate the funds. But he noted some board members may feel intimidated because they are appointed by the council.

Neitsch said he has no doubt the half-cent sales tax has benefited Victoria. He said while such projects as reconstruction of Laurent Street and Sam Houston Drive would still have been done, the sales tax money helped get them done more quickly.

Neitsch also estimated that the city would have had to increase the property tax rate 5 or 10 cents for each $100 of taxable property to come up with the same income produced by the sales tax.

"The sales tax is something paid by everybody that shops in Victoria," he said. "It's not just the residents of Victoria that pay for it; it's everybody, wherever they are from, that spends money and pays sales tax."

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