Voters OK half-cent sales tax
By Lori Thomason

Bullard leaders hope now the city can compete in the current economic climate.

Voters approved a referendum on Tuesday's ballot giving the city permission to create an economic development group by passing an additional half-cent sales tax.

Voting totals were 192 for and 72 against the measure.

Mayor Pro-Tem A.W. Hines is pleased with the voters' support.

"This is going to help Bullard's ability to attract tourism and fund infrastructure. And it would effectively put the city on a level playing field when it comes to sales tax collection rates," Hines said.

The council was unanimous in its agreement to put the issue to voters.

"Every city around us can compete, but without any incentives or proper infrastructure, where does that leave Bullard?" Hines said.

But he hates the word tax.

"It's completely consumption based," Hines said. "Most of us have - unwittingly funded a lot of infrastructure and improvements in other cities - it's about time they reciprocated.

"Every time we shop in Tyler, we're funding their parks and streets, but we're not doing anything about ours," he said. "The sales tax in in Bullard is the lowest in the area - which means every other surrounding city is taking advantage of taxable consumer goods and services to aid growth."

The move follows suit of surrounding cities like Tyler, Whitehouse, Troup and Jacksonville that have had what's commonly referred to as an economic development tax added to local sales tax for years.

According to the state comptroller's office - which oversees the collection and distribution of the tax - use of the money includes: projects for streets, roads, drainage, and other related transportation system improvements, water and sewer facilities and public parks, and park facilities.

City Manager Larry Morgan is ready to get to work now that voters have spoken.

"We're very pleased the voters have faith in this," Morgan said. "The money will be used - at least initially - to enhance and in some cases restore our infrastructure."

The process of setting up an economic development corporation will take place immediately, Morgan said.

"Even though the money will be garnered once the secretary of state sends the paperwork to the comptroller's office, we'll begin planning immediately.

Council members will canvas votes at 6 p.m. Nov. 16.

Last November Bullard residents overwhelmingly approved changing Bullard's government to a council-manager form - one more professionally managed.

"It's apparent Bullard citizens are not averse to progressiveness and change," Morgan said. "That's what our council trying to do - fully understand and anticipate the needs of those they serve."

Morgan said the council will appoint a board to oversee the money and a person to act as a facilitator - overseeing a council-approved budget, and getting to work attracting new business and perhaps expanding and retaining current business.

Bullard - until the election - was the only area city not using the half-cent tax.

Tyler, Whitehouse, Troup and Jacksonville charge the state maximum of 8.25 percent. Bullard's rate is 7.75 percent.

"Your citizens are already paying for the economic development of other cities," said John Villareal, from the state comptroller's office, who spoke to the city council in May. "They should see little difference locally in what they spend, but they will reap the rewards of the investment.

"And tourism dollars, which the city expects to continue to increase, will directly benefit economic development. "

Based on sales receipts from 2004, Bullard could generate about $46,000 more in yearly revenue.

But predictions, Villareal said, make the reality much more abundant than what it was two years ago.

"You all know the growth in the area," he said. "This is a major thoroughfare, and Bullard is set up geographically to be in a very advantageous spot." He said the revenue would most likely triple in the next three years.

While Bullard didn't fare as well as it did last October in sales tax revenue, with $8,922.74 collected down about 4.5 percent from last October, that could be attributable to a some miscommunication on collection by one business.

The comptroller's office recently contacted the city with

information that a local business was paying too much in sales tax and; therefore, the city is now obligated to pay back the money.

Since 1979, Texas law has allowed cities to form economic development corporations to attract businesses and create job opportunities.

The l989 Legislature amended the Development Corporation Act of 1979 to allow eligible cities the option of adopting a dedicated sales and use tax to fund industrial development projects - commonly referred to as a 4A tax. Further legislation in 1991 provided cities with a second form of sales tax to improve their appeal as places to live, work and visit, which is called a 4B tax.

"This is something we're more interested in," said council member Teresa Adams Wilks. "We're looking for funding that improves the quality of life for all of us, but allowing others to subsidize it, just like we do when we spend our money outside the city."

The 1991 Legislature added 4B to the act. It allows greater flexibility in the use of revenues. Generally, 4B expenditures are those available under 4A and projects that contribute to the quality of life in the community.

Such projects include building park-related facilities, professional and amateur sports and athletic facilities, tourism and entertainment facilities, affordable housing and any other improvement or facility that promotes new or expanded business enterprises.

The 1999 Legislature added job training, targeted infrastructure, job creation and retention, and educational facilities to the definition of project. This expanded the allowable uses of economic development sales tax revenues.

Every year since the adoption of the economic development

sales tax, the number of cities adopting the tax has increased.

In fiscal 2000, 490 corporations returned completed report forms to the Comptroller's office, compared with 446 the previous year. By fiscal 2001, that number jumped to 523 corporations.

"It makes sound business sense to use the 4B to allow us to better provide for our growing community," said councilman Rodger Johnson. "Everyone who buys gasoline or groceries, eats at our restaurants or patronizes our stores can help give back to the city and help fund our growth just as we do theirs."