One-quarter sales tax reauthorization encouraged
During Monday’s City Council meeting for the city of Levelland, the council conducted their second and final reading of Ordinance No. 1068 calling for an election to garner a portion of sales tax for road maintenance.
In May of 2007, Levelland voters approved a one-quarter percent increase in the sales tax to be used for street maintenance.
The Street Maintenance Sales Tax was created by the Texas Legislature in 2001 to provide cities an additional source of revenue to pay for street maintenance.
As long as it is within the two percent local limit, cities may adopt a one-eighth or one-quarter percent sales tax to be used for street maintenance.
In 2007, Levelland voters adopted a one-quarter Street Maintenance Sales Tax in order to help keep property taxes down as the city took on additional debt to pay for the reconstruction of Alamo Road and Ellis Street to serve the two new campuses that LISD had constructed on Alamo Road and Ellis Street.
The particular sales tax, unlike the other sales taxes the city collects, must be authorized by the voters every four years. Once passed, the sales tax is only good for four years and then it expires.
Each time the tax is set to expire, the voters can reauthorize it for another four years.
In May 2019, voters reauthorized the one-quarter tax percent with 91.90 percent voting in favor of the Street Maintenance Sales Tax.
The voters’ tax will expire at the end of October this year.
Last year, the one-quarter tax generated $566,905 which was used for seal coating and other street maintenance activities.
The total Street Department budget was approximately $900,000 in years where the city budgeted to perform seal coat maintenance. The current budget is $600,000 with no seal coating budgeted.
If the revenue is lost, the property tax would need to be increased to roughly $0.95 or about 18 percent to make up the revenue taxes.
The council unanimously agreed to approve the final reading and move forward with the election process regarding the one-quarter street maintenance tax.
The money generated by the tax may only be used for the repair and maintenance of existing streets and cannot be used to pay for new street construction.
Levelland City Manager Brandon Anderson explained that although there is not seal coating budgeted for this year, there is additional work to be done on the streets.
“There is still always a lot that we do in streets including the routine patching of potholes and manning the department in general,” said Anderson. “Obviously, streets are no different than everything else. Everyone is experiencing inflation in products they use.”
Prior to the tax, the city’s street maintenance program was costing more than tax generates.
The tax is assessed against all taxable sales in the city, so every shopper pays the tax.
This includes, but not only local residents businesses, but also those who are in town for special events such as Cotton & Crude and Music Fest.
The city’s street maintenance program is funded through the City’s General Fund which has three major funding sources: which are property taxes, franchise taxes and sales taxes.
The property taxes and franchise taxes are paid exclusively by local citizens and property owners, while residents also pay sales tax which is collected by businesses and paid by visitors who shop in Levelland.
Everyone, including visitors drive on the streets day and through the sales tax visitors will also share in the cost of maintaining the streets.
“I’d like to remind everyone that the this does not have anything to do with ad valorem tax,” said Anderson. “The three taxes that fund the general fund are sales tax, franchise and ad