LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 23, 1999
TO: Honorable Frank Madla, Chair, Senate Committee on
Intergovernmental Relations
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB 769 by Madla (Relating to the creation of an advanced
transportation district; authorizing the imposition of a
local sales and use tax for advanced transportation and
local development.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB769, As Introduced: positive impact of $0 through the biennium *
* ending August 31, 2001. *
* *
* No significant fiscal implication to the State is anticipated. *
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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 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Savings/(Cost) Revenue Savings/(Cost) Revenue *
* to Corpus Gain/(Loss) to from VIA Gain/(Loss) to *
* Christi Corpus Christi Metropolitan VIA Advanced *
* Regional RTA Advanced Tranit Transportation *
* Transit Tranportation District *
* Authority District *
* 2000 $(145,502) $3,111,909 $(515,265) $12,433,779 *
* 2001 0 7,473,981 0 29,841,069 *
* 2002 0 7,473,981 0 29,841,069 *
* 2003 0 7,473,981 0 29,841,069 *
* 2004 0 7,473,981 0 29,841,069 *
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Revenue *
* Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to Gain/(Loss) *
* All RTA RTA Cities with Corpus Christi from All *
* Cities--Local 1.5% Tax Rate Crime Control VIACities-- *
* Development District Local *
* Development *
* 2000 $3,111,909 $(212,652) $(1,327,183) $12,433,779 *
* 2001 7,473,981 (510,336) (3,185,240) 29,841,069 *
* 2002 7,473,981 (510,336) (3,185,240) 29,841,069 *
* 2003 7,473,981 (510,336) (3,185,240) 29,841,069 *
* 2004 7,473,981 (510,336) (3,185,240) 29,841,069 *
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*Fiscal Probable Revenue Probable Revenue Probable Revenue *
* Year Gain/(Loss) to Gain/(Loss) to Comal Gain/(Loss) to *
* Balcones Heights County Guadalupe County *
* Crime Control *
* District *
* 2000 $(273,244) $(16,811) $(16,811) *
* 2001 (655,785) (40,346) (40,346) *
* 2002 (655,785) (40,346) (40,346) *
* 2003 (655,785) (40,346) (40,346) *
* 2004 (655,785) (40,346) (40,346) *
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Technology Impact
None.
Fiscal Analysis
The bill would allow the board of the Corpus Christi Regional
Transportation Authority (RTA) and 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 0.5 percent. If the majority of voters in the municipality with the
largest population within each authority (Corpus Christi or 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 and until January 1, 2010, 50 percent of the
proceeds of the additional 0.5 percent sales tax would go to the
advanced transportation district, which would be governed by the board
of the transportation authority, and 50 percent would be distributed to
each participating unit. In cases 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.
Municipal sales and use taxes greater than 1 percent effectively would
be reduced to 1 percent.
Methodology
This analysis assumes that the boards of both transit authorities would
call an election to create an advanced transportation district during
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 entities in each authority
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. If fewer municipalities choose to join an advanced transportation
district, the revenue estimates could be significantly lower than
presented in this estimate. If the board of either transit authority
would not choose to order an election to create a district, no fiscal
implications to the authority or to any municipality that belongs to the
authority would be expected.
Based on the 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
$145,502 for the Corpus Christi RTA (population 279,812) and $515,265 for
VIA (population 990,895).
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 0.5 percent sales tax for the newly created advanced
transportation districts of Corpus Christi RTA and VIA Metropolitan
transit would generate revenues equal to the amount of revenue each
authority collected in calendar year 1998.
The estimated 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
Impact to Cities in the Corpus Christi RTA:
All seven of the RTA cities (Agua Dulce, Bishop, Corpus Christi,
Driscoll, Gregory, Port Aransas and Robstown) would be expected to
receive local development revenues. It is estimated that these cities
would share approximately $7.5 million per year. These revenues would be
allocated according to transit authority sales tax collection levels in
each municipality. Assuming transit authority sales tax collections
levels generally coincide with municipal sales tax collections, it is
expected that the City of Corpus Christi would receive at least 90
percent of the local development revenues.
Currently, the cities of Bishop, Driscoll, Port Aransas, and Robstown
each levy a sales and use tax of 1.5 percent, and each has a total sales
and use tax rate of 8.25 percent. If these cities were to join the
advanced transportation district, it is expected that each city
effectively would lose one third of current sales tax collections, since
the city rate would be reduced to 1 percent. The combined loss to these
four cities is estimated at $510,336 per year. Individual cities could
lose the following amounts per year: Bishop, $35,745; Driscoll, $37,014;
Port Aransas, $206,180; and Robstown, $256,103. Some of the loss could be
offset by local development revenues.
The Corpus Christi Crime Control District currently imposes a sales and
use tax of 0.125 percent. Since the total sales and use tax rate in the
city is now 7.875 percent, the crime control district would lose all of
its sales tax revenues upon creation of the advanced transportation
district. The loss could total approximately $3.2 million per year. The
local development revenue to the City of Corpus Christi could offset the
loss to the crime control district.
Impact to Cities in VIA Metopolitan Transit:
All 16 of the cities belonging to the VIA Metropolitan Transit authority
would be expected to receive local development revenues. It is estimated
that these cities would share approximately $29.8 million per year. These
revenues would be allocated according to transit authority collection
levels in each municipality. VIA estimates that the City of San Antonio
would receive almost 95 percent of these revenues.
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 sales tax
rate in Balcones Heights is at 8.25 percent, the crime control district
would lose all of its sales tax revenues if the City of Balcones Heights
votes to join the advanced transportation district. It is estimated that
the loss to the district would be approximately $655,000 per year. Local
development revenues to the city could offset some of the loss to the
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 sales and use tax rate within the
city is now at 8.25 percent, it is expected that all county sales and
use tax revenues would be lost. Each county could lose approximately
$40,000 per year.
Source Agencies:
LBB Staff: JK, TL