Representatives of Hopkins County Commissioners Court and a candidate for Place 3 on the council addressed the Sulphur Springs City Council Tuesday night during their regular April session. However their request for support of Texas Senate Bill 1158, which is somewhere under a stack of bills in the Senate Finance Committee, were rebuffed not only by a six to one vote of the council but also by the statements of city staff including City Manager Marc Maxwell and City Finance Director Peter Karsten and all but one of the members of council supporting opposition to the bill.
County Judge Robert Newsom, Commissioners Beth Wisenbaker and Wade Bartley, and Charles Oxford, candidate for Place 3 on the council opposing incumbent Oscar Aguilar, spoke in favor of the council supporting 1158 and allowing county residents to vote on the sales tax increase that could be as low as one eighth or reach as high as one half cent increase. Newsom pointed out that the increase in sales tax would be devoted to paying for the new jail construction while offsetting a seven cent property tax increase. Wisenbaker pled for the opportunity for county citizens to vote on the issue should the Texas legislature approve the bill. Bartley and Oxford said they supported the idea of 1158 and though it would relieve property owners while sharing the cost of the new jail construction with all in the county. All four stated that when the cost of the jail construction was paid, the sales tax would end.
City Manager Maxwell presented the staff report in opposition to the bill. Maxwell pointed out that the bill (1158) states that after excess indebtedness is paid, the excess revenue can be used for any purpose for which county general revenue may be used. He also pointed out that after the initial reduction in property tax, there was no limit on the rate of increase that could be made to the property tax. Maxwell cited, with the help of photo copy of the resolution and a chart of tax increase, an April, 1987 vote in which county commissioners promoted and the county adopted a one half cent sales tax to reduce property taxes but that in following years the property tax increase. Maxwell said voters are not substituting one tax for another. Instead, both the increased sales tax and eventual increased property tax and are imposed.
Maxwell also pointed out that with increased sales tax came the loss of jobs, retail sales, and population. He used research with the city of Texarkana. Texarkana is located in both Arkansas and in Texas. The portion of the city in Miller County Arkansas has a 10% sales tax while the segment of the city in Texas has only an 8.25% sales tax. Maxwell said all auto dealers except a couple of mom and pop used car dealers, all major retail, and the larger population are on the Texas side of the city. He pointed out that if Sulphur Springs wants a Starbucks, a Target, and other major retailers, being the highest sales tax city and county in the state will not see those retailers moving here.
Major industry will not choose a city and county with higher taxes. He stated that higher sales tax undermines growth.
Councilman Craig Johnson raised the question of a dollar for dollar decrease in property taxes with the use of a designated sales tax. Johnson said asked where would the county find money for their operations budget for county services including the operation of the jail. He so questioned if people outside the county would shop here when they became aware of the higher tax rate.
Clay Walker questioned if those building houses would purchase their building materials outside the county? He stated that not only would the county lose the increased tax but also the normal tax that they would make from the sale of items in the county.
Kayla Price, who would eventually vote against the city opposing the bill, asked if the city should wait until the state legislature approved 1158. Price said she thought that at this time residents should be given the opportunity to vote for or against the increase in sales tax. Price said opposing the tax and not supporting the bill to give citizens the right to vote were two separate things, in her opinion.
Council person Emily Glass agreed that these were two separate items and thought citizens should have the right to vote but when council person John Sellers said the vote to oppose the bill would not prevent people from voting if the bill was passed by the legislature but rather the council’s vote expressed the idea of the city regarding their opposition to the increase in sales tax found in the bill, Glass agreed to vote in favor of opposing the bill.
Johnson’s motion to approve opposition to Texas Senate Bill 1158 was second by Oscar Aguilar.
Thursday morning, City Manager Maxwell spoke with KSST News.