Council advances tax referendum without sunset
The Red Oak City Council is moving forward on their local option sales tax referendum.
At the council meeting May 7, city administrator Brad Wright said plans called for the referendum to be placed on the general election ballot in November. Wright said he was proposing two changes in the verbiage on the referendum, the first being the time frame.
“In the past we’ve done a five-year sunset. At this point, everyone across the state has a local option sales tax referendum, and understands the necessity. This referendum follows my recommendation of eliminating the sunset. That way, we don’t have to put the referendum on the ballot every five years, and if we want to change the split of the tax funding, it can be put on the ballot at any time,” Wright said.
Wright’s only other recommendation was changing the language on the 5 percent of local option sales tax funding being changed from going to the Red Oak Chamber and Industry Association to simply: “economic development.
“That gives us the ability to fund the Montgomery County Development Corporation, as we’re contractually bound, and down the road, if MCDC gets private money and doesn’t need the level of input coming in from Red Oak, we can use the funding for something else related to economic development and gives us the latitude to use the money for anything we feel is related to economic development,” Wright said.
ROCIA President Larry Brandstetter, who was in attendance at the meeting, said the current fund dispersal involves the ROCIA getting the full amount from the sales tax funding, which they pay to MCDC, and the remaining funds are left with the Chamber for community marketing.
“If all the money goes to MCDC, the money will not be coming to the ROCIA for marketing Red Oak and developing Red Oak, and it would say the Chamber has nothing to do with marketing Red Oak, and it’s all in the hands of MCDC,” Brandstetter.
Red Oak Mayor Bill Billings disagreed and said that was not being said by the updated language in the referendum.
“It will all be earmarked for economic development. If the Chamber has something they need funding for, they can come to the council for approval. It’s not simply going to be a hand-off of cash for anybody. The money dedicated to MCDC will go directly to them, and any remaining funding will be used for any community marketing as it’s applied for by the city council,” Billings said.
Brandstetter asked if this meant there would no longer be a guaranteed stream of funding coming to the ROCIA for community marketing, and if the ROCIA would now have to ask for approval from the council any time they wanted to put forth a marketing initiative.
Wright advised it would be up to the council to determine the flow of money. They could either set a guaranteed level of funding, or state the funding would be dispersed on a project-by-project basis, and would be determined during the budget process.
Brandstetter said the Chamber was never told this change was being considered, and this was the first time they’d heard the steady stream of funding coming in for community marketing may or may not be there.
Billings said MCDC also does a lot of community marketing that may need additional money, and may look at asking for money from the council, the same way the ROCIA would, and this referendum was meant to eliminate specifics.
“There’s no guarantee that in 10 years, the ROCIA or MCDC will exist. The language recommendation is to put it as economic development in the language so that all parties in existence and a part of economic development can ask for those funds,” commented Billings.
Brandstetter disagreed, and said he felt the language change took a responsibility that has been with the Chamber for many years, that responsibility being marketing the community, and put it in jeopardy.
“It takes a flow of funds going into the Chamber that has been to support the Chamber in those efforts, and now says they have to ask and be in competition with others for the potential marketing of Red Oak. It will change the way marketing occurs and have an impact on the Chamber from a financial standpoint, which is something you need to consider,” said Brandstetter.
Wright said if the Chamber presented the council with an annual budget for marketing, or for marketing on a project-by-project basis, he was confident the council would fund them.
Billings said the recommendation to change the language to economic development gave the city an umbrella to use the funds in multiple ways, whereas dedication of dollars did not allow for growth, change, or reduction.
The council made no changes to the referendum presented by Wright. The referendum will be voted on at a future council meeting.