The issue is whether or not voters think Beeville’s half-cent sales tax for economic development should be reduced by one-eighth of one percent and that portion of the tax then be used for street maintenance within the city limits.
Although not every one of the five City Council members has offered support of the proposal, every one of them has favored allowing the voters to decide the issue.
The city now collects about $850,000 from the 4B sales tax. If the issue passes on Nov. 4, about $212,000 of that money would be set aside for projects like seal coating city streets, purchasing street maintenance equipment and other projects related to maintaining streets.
The remaining $638,000 a year would still be available for use by the Beeville Economic Improvement Corporation to be used to finance economic development projects, including quality of life projects such as park improvements.
City Manager Ford Patton said that is still plenty of money for economic development projects.
The City Council sold the 4B sales tax to citizens in 1996, saying the tax would provide funding for street maintenance, drainage and water and sewer projects by taxing the people who used those services rather than just hitting property owners with higher ad valorem taxes.
About a year earlier the City of Victoria had sold the half-cent 4B sales tax to its citizens citing the same argument.
Patton said Victoria still spends a significant amount of its 4B money on capital improvement projects.
When the tax first went into effect in Beeville on July 1, 1996, the city collected about $500,000 a year from the half-cent tax. “Beeville’s sales tax receipts have steadily increases over the past four to six years,” Patton said.
Even if the proposal is approved by the voters this year, that does not make it permanent, Patton said. If voters do not renew the change every four years, it automatically expires.
Patton said city streets need to be seal coated about every 10-12 years to keep them from deteriorating to the point where they have to be rebuilt. The $212,000 a year would enable the city to seal coat about 100 blocks of its 1,140 blocks of paved streets each year, based on the $138,000 it cost to seal coat 43 blocks of streets this summer.
“But that would be good,” Patton said. “It would be better than we’re doing now. If we can get to every street in 12 years, then we’ve got it licked.”
Patton said most people think of a street at the asphalt on the surface. But the street actually is the base, the caliche under the pavement. The asphalt provides a wearing surface and a seal for what is beneath it.
Jessy T. Garza, member of the EIC board, does not agree that taking $200,000 out of the corporation’s income each year is a good thing.
“It’s been proven through economic studies and anecdotal data that economic development always trumps direct investment in infrastructure,” Garza said this week.
He said this community needs more jobs and a greater tax base.
“We’re seeing school teachers upset that a vote has to be taken for them to get a pay raise. We’re seeing a county that is trying to fund long-term budget shortfalls and a city that is trying to find out how to fund its street maintenance.”
“The benefit of economic development is that it helps all these taxing entities.” Garza said that Beeville Independent School District Superintendent Dr. John Hardwick Jr. has said the school district is in for hard times because of a lack of funds.
“You can only go to the taxpayer so many times,” Garza said. “The only way to help these taxing entities is through economic development.”
Garza said that the final reason for voters to turn down the proposal on election day is because the city misused the 4B funds for years.
“I don’t care what City Hall says. How do I know? I studied the legislation and the attorney general and outside law firms agree.”
“But that’s in the past,” Garza said. By using the money correctly, he said, the EIC has allowed the city to fund parks improvements, the renovation of the Rialto Theater in downtown Beeville, a new Holiday Inn Express and projects taken on by the Bee Development Authority to help bring in new, high-paying jobs at Chase Field. Now the EIC is using 4B money to provide business improvement grant program for businesses in the city but outside the Beeville Main Street area, he said.
“For the first time we’ve created a portfolio of economic benefits for this community. And now they want to take it away.”
Garza said supporters of the proposition counter that claim by saying they only want to take a piece of it.
“But to that I say, we’ll be left with very little,” Garza said.
With more than $200,000 going toward street maintenance, that will leave the EIC with only about $600,000 to use for economic development. From that about $150,000 goes to pay off existing debt and the EIC ends up with only about $450,000 to fund its projects each year.
The first things any prospective business wants to know when looking at Beeville as a place to locate are what are the tax rates and what are the utility rates, Patton said. “Those are the costs of doing business.”
If the city has a steady source of money from an existing sales tax that can be used to maintain streets, then there is no need for property owners to worry about their ad valorem taxes going up to maintain streets.
“To provide transportation in a cost-effective manner is good for citizens and taxpayers,” Patton said. “You can always sell bonds to finance street repairs but your adding costs and increasing debt at expense to taxpayers.”
“We’re not just residential, we’re not just business, we’re not just institutions, we’re an entire community. Everybody pays part of the costs,” Patton said. “And if you can do it in a way that is cost effective for everyone, everyone comes out ahead.”
Patton said the payback costs of the city’s most recent sale of $2 million in certificates of obligations will end up costing taxpayers $3,192,000. “Yeah, you can do it,” Patton said of selling bonds. “But you pay for it.”
Garza disagrees. He said that adding jobs and expanding the tax base is the best way to address future needs for infrastructure improvements.
“That’s why it’s important to maintain the sanctity of that money,” Garza said.
He expects the city to come back to the EIC in the months ahead with requests to finance parks projects. “But primarily we need money in case a business comes to us for assistance.”
Joe B. Montez, executive director of the Bee Development Authority, agrees.
“There are two major elements in economic development,” Montez said. “Human capital, meaning smart people who can plan ahead for business expansion. And financial capital, money. You’ve got to have money. If you don’t have money to offer incentives for businesses to come here, then you might as well shut down.”
“You’re in competition for the jobs out there,” Montez said. “In competition with the state, with larger cities, with counties and with smaller cities. We need money to improve runways and taxiways at Chase Field. We need money for water and sewer facilities. We need money to remodel facilities and offer relocation assistance.”
Montez said the increasing workload at the Sikorsky Support Services facilities under lease at the Chase Field Industrial Airport Complex has created more than 200 high-paying jobs at the former naval air station.
“They’ll be hiring another 100 employees in the next six to eight months,” Montez said. “We’ll have slightly more than 350 employees with Sikorsky, Kay and Associates and General Shelters.”
“I’m working on a major plan for Chase Field that could bring another 150-200 jobs to the facility,” Montez said. “The BDA does not have all the money it needs to do this.”
Montez asked that people take a look at increases in sales taxes coming to the city and county, take a look at increasing ad valorem tax assessments, consider the increase in traffic on Washington Street and U.S. Highway 59 and look at the number of new businesses coming into Beeville.
“While most of the nation is regressing, we’re in a boom, really,” Montez said.
But Mayor Kenneth Chesshir said he sees support for the issue among members of the City Council.
“I feel, along with most of the council and almost everyone I talk to, that the 4B sales originally was to be used for this,” said Chesshir. In the past year some in the community have changed the way the money is spent and less of it now goes toward infrastructure, he noted.
He reminded voters that the original intent of the 1996 election was to give the city a way to pay for street, water system and drainage improvements.
The aim of Tuesday’s election is to give the people a chance to protect at least one-eighth of a percent for street maintenance,” Chesshir said.
“It’s a small group of people who are trying to convince the public that after the millions that have been spent and will be spent on economic development, there won’t be enough money for that purpose if this passes,” the mayor said.
“What’s in the balance is good streets without putting more of a load on the backs of property taxpayers. I’ve been mayor more than 12 years and this is one of the easiest decisions we will make. I see no gray in this. It is as clear as it can be,” Chesshir said. “It’s nice streets paid for by an existing tax or nice streets and higher taxes.”
Chesshir said he also supports using 4B sales tax funds for park improvements, saying some of that money has gone toward park improvements already this year. Spending 4B money on parks qualifies as a quality of life expense. And the mayor said nice parks are one of the attractions that bring new business to Beeville.
Garza believes just the opposite. “These actions (the election issue) are those of very short-sighted people who have not thought this out. In the long run, we’re going to get hurt by it.”
“The country is on the verge of a depression,” Garza said. “We’re being affected. We need every red cent we can get hold of to promote economic development. This is our stimulation for the local economy.”
Montez said his concern is that if the issue passes and the EIC loses more than $200,000 from its 4B sales tax income, it could affect the financial capital of this community’s economic development situation.
“If you’re missing one of these components, you’re not going to go anywhere,” Montez said. “People in Beeville are ready for this community to grow.”
Montez said that when the Navy closed Chase Field the new McConnell Unit prison was the only thing that kept this community going. After that the Texas Department of Criminal Justice brought more prison jobs to much of what was once the naval air station.
Now, as the BDA is working to diversify the kinds of jobs available in Bee County, a major source of funding is being threatened, he said.
“I understand infrastructure is important,” Montez said. “But if we can all work together and make economic development money available, we can provide more jobs for this community. We have asked for money in the past and it has been put to good use in the creation of jobs.”
City Secretary Tomas P. Saenz informed the City Council at a meeting last month that the city is required to set up a polling place within each of the county’s voting precincts located in the city.
Eight of those precincts are within the city and they will open at 7 a.m. Tuesday and remain open until 7 p.m.
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