COLUMN: Knock a Nickel

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Dr. Malcolm Cross
Dr. Malcolm Cross

“Citizens invited to make recommendations for city budget.”  So says the headline for a recent story in the local “newspaper.”

The most important and time consuming tasks the city council will face this summer are the development of proposals for the budget and property tax rate for the 2016-2017 fiscal year.  To anyone who cares to accept the city council’s invitation to make budget recommendations, I offer this suggestion, free of charge:  Tell the city council to “knock a nickel” off the current property tax rate of 49 cents per $100.00 assessed evaluation, by beginning the process of abolishing the SEDA.

The Stephenville Economic Development Authority was created by Prop 1 last year, which directs the city council to divert 8.33% of the collected city sales tax to a fund to be used on “economic development” projects to be proposed by the SEDA’s Board of Directors, subject to the approval of the city council itself.  Exactly what projects the board and the council will choose remain to be seen—after all, since Prop 1 was passed, they’ve done little in this area other than bungle the hiring of the first SEDA executive director.  But the council’s decisions to give a grant to Ranger College and a tax break to a prospective restaurant aren’t promising—unless one likes favoritism, pork barrel politics, and corporate welfare.

Now, the 2015-2016 budget set aside, for SEDA-related “economic development” projects, $466,667—about the same amount of money as generated by a 4.5 cent property tax rate.  So abolishing SEDA would allow the city to take the money earmarked for SEDA and put it back into the general fund.  By increasing the general fund with SEDA money, the city council could then cut the property tax rate by 4.5 cents without cutting the overall amount in the general fund. 

Cutting the property tax would not necessarily diminish the city council’s ability to promote economic development.  To the contrary, it might stimulate more economic activity as citizens get to keep, spend, save, or invest more of their own money.  Moreover, a lower property tax rate overall might make Stephenville, compared to other cities with higher rates, a more attractive city to start or relocate a business.

Now, when I was on the city council I opposed council attempts to reverse policies adopted by the voters in referendum elections.  Thus in 2004 I voted against financing and building the Proctor Pipeline, since the voters had already rejected financing and building it in a referendum in 2000.  By the same token, the city council probably shouldn’t abolish SEDA unless and until the voters say, in a new council-called referendum election, that they’ve changed their minds and now want SEDA gone.

But the advantages to abolishing SEDA—the opportunity to cut property tax rates without cutting services, to make Stephenville more attractive to those who want to live and work in a community with lower taxes, and to reduce the opportunities for favoritism, pork barrel politics, and corporate welfare—justify the effort to do so.  It can begin if voters will tell the council that it should “knock a nickel” off the property tax rate by getting rid of SEDA.

Malcolm L. Cross has lived in Stephenville and taught politics and government at Tarleton since 1987. His political and civic activities include service on the Stephenville City Council (2000-2014) and on the Erath County Republican Executive Committee (1990 to the present).  He was Mayor Pro Tem of Stephenville from 2008 to 2014.  He is a member of St. Luke’s Episcopal Church and the Stephenville Rotary Club, and does volunteer work for the Boy Scouts of America. Views expressed in this column are his and do not reflect those of The Flash as a whole.

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