Posted on 11/05/2003 6:02:35 AM PST by Theodore R.
Story last updated at 12:52 a.m. Wednesday, November 5, 2003 Voters buy into sales tax boost By JOHN FUQUAY AVALANCHE-JOURNAL
Lubbock on Tuesday became the latest major Texas city to adopt a sales tax for economic development, with 61 percent of the vote backing the issue that also will reduce city property taxes.
"Obviously, to say I'm pleased would be an understatement," said Mayor Marc McDougal, who introduced the plan during a budget work session in July.
The proposal was partly to offset new property evaluations that, in some cases, hit homeowners with 40 percent increases in taxable property values.
"I don't think there's any question, taxes have been a big issue this past year, especially with evaluations. That's why the City Council cut taxes 2.43 cents this year, and this will cut another 8.28 cents next year for nearly 10.75 cents in one year," McDougal said.
Voters approved a three-eighths of a cent increase in the local sales tax rate: 10,324 in favor and 6,527 opposed.
The new sales tax revenue, estimated at almost $10 million annually, will be used to reduce property taxes and authorize an economic development corporation.
A quarter penny will offset city of Lubbock property taxes by 8.2 cents per $100 valuation. The current rate is 54.57 cents. The new tax rate, which will take effect Oct. 1, 2004, will depend on next year's assessments.
An eighth of a cent, which will generate $3.2 million annually, will be used to finance economic development activities currently managed by Market Lubbock, Inc.
The funding will replace payments that currently come from Lubbock garbage, sewer, water and electric rates. McDougal said the change is important because more money will be available for the utilities.
The added sales tax will push the combined rate to the maximum 8.25 cents per $1. The state levies 6.25 cents; Lubbock County receives half a cent, and the city will begin levying 1.5 cents on Oct. 1, 2004.
City Councilman Gary Boren has been outspoken against rising property taxes and proposed two bills to state legislators that would have given tax relief to property owners. Neither proposal was passed, but Boren said Tuesday's election demonstrates a growing resentment toward rising property taxes.
"I think it sends a clear message to taxing entities and the appraisal district that property tax needs to be kept under control," Boren said. "These 10 to 40 percent increases are ridiculous and need to stop. It sends a message to the appraisal district to be realistic."
The lower property tax will save the owner of a $100,000 house about $80 a year. The sales tax increase will add 37 cents to every $100 of taxable goods.
Lubbock voters offered mixed views during polling on Tuesday.
Harold Massey said visitors to Lubbock use the police and use parks, but do not contribute as much to Lubbock's tax base.
"They should not pay more, but there is not a reason they should not pay anything," he said.
Kim Swacina agreed.
"This will spread the taxes more evenly over the community and not just place the tax base on the homeowners," Swacina said.
Larry Cunningham, who owns a small home, said he and his wife voted against the sales tax because he believes it will predominantly help people with large properties or multiple properties.
Fellow homeowner Paulette Kreck voted against the tax because she said increasing the sales tax will not stop higher valuations.
Mary Siders said she supported the tax because she believes in new businesses for Lubbock and stricter mandates on the businesses recruited to Lubbock and appreciates the property tax decrease.
As an employee of two large Lubbock hotels, Siders said new businesses benefit the hospitality industry.
Raymond and Cecilia Thackrey, voting Tuesday evening at Wolffarth Elementary, gave a thumbs up to the tax. Raymond Thackrey said the extra money for economic development will provide more money to attract businesses.
"Plus it will help lower the property taxes, especially in some of these areas where they've gone up so much," he said. "I think they need to bring them back down."
Cecilia Thackrey said she's heard about success with the sales tax for economic development.
"I heard it worked in Amarillo. So if it's working for them, then why not for us?," she said.
jfuquay@lubbockonline.com 766-8722
Isn't this an oxymoron?
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