Council considers sales tax provision

In News by Reporter News

In 2010 Manvel city council authorized a ballot proposition, which voters subsequently approved, that siphoned half the sales tax allocation that had been devoted to the Manvel Economic Development Corporation (MEDC) to be dedicated instead to street maintenance. At that time the poor condition of city roads was a recurring complaint heard by council members. City coffers were hard-pressed to meet basic city services and road maintenance often faced postponement.

Today city roads are in a far better state and the funds budgeted to their maintenance are greater in amount and more secure in availability than ever before. With new development contributing to city tax rolls, recent budgets are significantly less strained than previous years. Some MEDC members cite those better conditions to support their desire to reclaim the full 1/4 of one cent sales tax allocation that was in place since the group’s inception.

At a recent city council meeting members considered options on how best to direct staff on calling the election that is required regardless of whether or not the funds will revert to MEDC. Without voter approval the 1/8 share would simply go away and the city would have to go through a process to reclaim the percentage and risk losing it permanently should another taxing entity somehow make a claim. City Manager Kyle Jung told council that the amount in question in the current budget approximates $275,000. As city sales tax revenues increase in coming years that amount will go up correspondingly.

The city’s Director of Public Works, Jay White, not surprisingly told council that he would prefer the money remain in the road budget. He did concede that his department is in much better shape than in previous years and benefited from the city’s authorization last May to spend $355,360 on road building equipment. Additionally, the road department has benefited from a council action in 2007 that allowed unspent funds in the budget year to be rolled into a dedicated road fund that could only be used for that purpose. Those funds had accumulated to approximately $370,000 which paid for the new road equipment.

Members of MEDC in 2010 were divided and council member Melody Hanson, who was a member of the Board then as she remains so today, said the group lost their chairman as a result of the council action. Hanson herself was opposed to the idea then and would like to see the prior funding level restored. She feels the city spending money on economic development initiatives, such as the current water and sewer project under construction on Hwy 6, would be far better for the city in the long run.

MEDC funds can be used for many things other than infrastructure improvements. As this city grows and companies want to come here they will be asking for things that MEDC’s in other cities typically provide as incentives. Members voicing support feel it is time for the city to start thinking longer term. The city does maintain glaring needs in infrastructure development but as it begins to catch up with growth MEDC could look at other ways to improve the economic base and enhance the local business environment through programs designed to attract, retain, and assist new and existing businesses.

Some members on council fear the citizens rejecting the ballot language simply because it will necessarily include the word tax even though it would not implement a new tax at all but rather change the manner in which current tax receipts are allocated. Hanson says the words used to explain the ballot measure are critical so that voters properly understand what they would be voting for or against.
Manvel’s new full-time city attorney, Bobby Gervais, said the ballot language is mandated by state law. He was directed to present various options and ballot language at the next council meeting for members to consider.

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