LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 5, 1999 TO: Honorable Bill Carter, Chair, House Committee on Urban Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: HB 3705 by Van de Putte (Relating to the creation of an advanced transportation district and authorizing the imposition of a local sales and use tax for advanced transportation.), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3705, Committee Report 1st House, Substituted: positive impact * * of $0 through the biennium ending August 31, 2001. * * * * No significant fiscal implication to the State is anticipated. * ************************************************************************** General Revenue-Related Funds, Five-Year Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $0 * * 2001 0 * * 2002 0 * * 2003 0 * * 2004 0 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Savings/(Cost) Revenue Revenue Revenue * * to VIA Gain/(Loss) to Gain/(Loss) Gain/(Loss) to * * Metropolitan VIA from Balcones Comal County * * Transit Metropolitan Heights Crime * * Transit Control District * * 2000 $(515,265) $12,433,779 $(273,244) $(16,811) * * 2001 0 29,841,069 (655,785) (40,346) * * 2002 0 29,841,069 (655,785) (40,346) * * 2003 0 29,841,069 (655,785) (40,346) * * 2004 0 29,841,069 (655,785) (40,346) * *************************************************************************** ***************************************************** * Fiscal Year Probable Revenue Gain/(Loss) to * * Guadalupe County * * 2000 $(16,811) * * 2001 (40,346) * * 2002 (40,346) * * 2003 (40,346) * * 2004 (40,346) * ***************************************************** Technology Impact None. Fiscal Analysis The bill would allow the board of the VIA Metropolitan Transit (VIA) to order an election to create an advanced transportation district within the authority's boundaries and to impose a sales and use tax at the rate of 0.25 percent. If the majority of voters in the City of San Antonio would vote in favor of the proposition, the district would be created. If the majority of voters in any other municipality or unincorporated area within the authority would vote in favor of the proposition, the district would also include the territory of those entities favoring the creation of the district. The authority would pay for the cost of an election. Upon creation of a district, in units of local government where the imposition of the local sales and use tax by the transportation district would result in a total local sales tax of more than 2 percent, all local sales and use taxes imposed by or within the unit would be repealed, except for the authority's sales and use tax and the municipal sales tax of 1 percent. Methodology This analysis assumes that the board of VIA Metropolitan Transit would call an election to create an advanced transportation district during the first half of fiscal year 2000 and that the Comptroller of Public Accounts would receive a copy of the order canvassing the election results prior to April 1, 2000. This analysis assumes that all 16 municipalities and the unincorporated areas belonging to VIA would vote in favor of the creation of a district. It is assumed that the sales and use tax of the district would thus take effect on April 1, 2000. Assuming a median cost of a local election of $.52 per capita, as determined by a recent survey of local governments, the cost of an election to create an advanced transportation district is estimated at $515,265 for VIA. This is based on a population of 990,895 in the incorporated areas of VIA. The Comptroller of Public Accounts' "Allocation Historical Summary" sales tax data for calendar year 1998 was used in this analysis. It is assumed that the 0.25 percent sales tax for the newly created advanced transportation districts of VIA Metropolitan transit would generate revenues equal to 50 percent of the amount of revenue the authority collected in calendar year 1998, since the authority's current sales and use tax rate is 0.5 percent. The estimated revenue losses to Comal and Guadalupe counties are based on the assumption that county taxes imposed within the City of Selma would be repealed upon creation of an advanced transportation district. Tax collections for the City of Selma were used to estimate county tax collections, and, for the purposes of this analysis, it is assumed that the city's sales tax collections are spilt evenly among the three counties in which Selma is located: Bexar, Comal and Guadalupe. Local Government Impact The newly created advanced transportation district would receive revenues of approximately $29.8 million per year to be used for advanced transportation purposes within the district. If the City of San Antonio would vote to create the district, but some of the other 15 municipalities or the unincorporated area of VIA would choose not to join the transportation district, district revenue could be as much as 5 percent lower than presented in this estimate. Since the City of Balcones Heights Crime Control and Prevention District imposes a sales and use tax of 0.5 percent, and since the total local sales tax rate in Balcones Heights is already at 2 percent, the crime control district would lose all of its sales tax revenues if the City of Balcones Heights would vote to join the advanced transportation district. This would result in an estimated loss to the district of approximately $655,000 per year. If voters in Balcones Heights would choose not to join the district, there would be no fiscal impact to the Balcones Heights Crime Control District. Since Guadalupe and Comal Counties each impose a 0.5 percent sales tax in the City of Selma, and since the total local sales and use tax rate within the city is already at the maximum 2 percent, it is expected that the county sales tax would be repealed within the municipality, if the voters in the City of Selma would vote to join the district. Consequently, each county could lose revenues estimated at approximately $40,000 per year as a result. If the City of Selma would not join the district, there would be no fiscal impact to these counties. If the board would not choose to order an election to create a district, no fiscal implications to the authority, to any municipality, to any county or to any special district would be expected. Source Agencies: LBB Staff: JK, TL