Small City with Limited Retail Revenue

[mayor_maxwell]

In many small cities, especially those without large shopping centers or big-box retailers, property taxes are the backbone of local government funding. Unlike larger municipalities that can rely heavily on sales tax revenue from bustling retail corridors, small communities like Universal City, must depend on what residents and businesses contribute through property taxes to maintain essential services.

These Core City Services are the largest share of property tax dollars that goes toward the services that residents interact with daily. Police and fire protection, emergency medical services, and street maintenance are funded primarily by these taxes. Without significant sales tax revenue to supplement the budget, property taxes ensure that public safety remains reliable, and roads remain usable.
The daily Infrastructure and Maintenance are also supported by property taxes. They assure the upkeep of local infrastructure. This includes not only streets but also public buildings such as city halls, libraries, and community centers. For Universal City, reinvesting in infrastructure is a balancing act, stretching limited resources to cover both routine maintenance and long-term improvements. This includes long range planning for big ticket items such as replacing police, fire vehicles, and protective and safety equipment.

Universal City hosts a number of popular Parks, Sports Fields, Playgrounds, Disc golf, 18-hole Golf Course and other Quality of Life Amenities. We are fortunate to have income from rental fees, sales and grants to offset the cost of these programs. We also have a portion of retail sales tax revenue dedicated to supplement costs that the amenities income does not cover. The good news is, we have not had to use property tax revenue to fund or supplement these programs for the past 15 years.

Universal City takes pride in our parks, playgrounds, and seasonal events and plan to continue them for you and continue to plan for future generations providing the steady funding to keep green spaces safe, clean, and welcoming.

Administrative and Compliance Needs are behind the scenes costs. These are the People that make it all happen. Property tax dollars pay the staff and operations necessary to keep a city functioning. From utility billing and permitting to planning and zoning, property taxes make sure residents receive the administrative support they need.
We pledge to keep property taxes only to the level needed to meet annual needs while making strategic high-cost purchases so future generations will not have to be burdened with higher costs due to our poor planning.

And Yes, Revenue Sales Taxes matter as they can provide valuable flexibility for cities. We have a strongly programed initiative to increase our retail business base. We have a strong vibrant Economic Development program that provides assistance with Retail business projects and capital improvements that property taxes alone can’t sustain.

In Conclusion Universal City property taxes are more than just a bill residents pay once or twice a year. They are the foundation that keeps our city running. They pay for the officers who patrol the streets, the firefighters who respond in emergencies, the crews who fill potholes, and the parks where families gather. In short, property taxes make small city living possible.

Thank you,
Tom Maxwell, proudly serving you as Mayor.

 

[council4_vaughan]

I would agree with much of what you said, Mayor, especially the part about keeping our property taxes only to the level needed. Its important that we balance the needs of the City to provide services and the needs of our residents and businesses to keep their hard earned money.

So, the question for us is are we doing everything we can to maintain that balance? Have we considered all of the funding streams available to us and put those tax dollars to the highest and best use?

We are only allowed 2% sales tax. We have maxed that out but directed a large portion of it (half) to dedicated purposes that are not essential services (economic development and the golf course).

Our EDC can and has done some good things to stimulate our economy. But, there have also been some investments that didn't pay off. This is not a knock on our EDC but an acknowledgement of how difficult it is to spend money in an attempt to stimulate economic development. Sometimes it is not going to pay off like we hoped. Having some of that sales tax directed to essential services (in my opinion) would do more to impact and improve the lives of the residents of Universal City. It is important to note that the EDC has issued debt and that sales tax cannot be modified until those debts are paid off. However, the EDC can make a lot of targeted infrastructure improvements in business districts that will help out property taxpayers. Business grants should be measured against the revenue that potential business will generate for the community and not paid to that business until they deliver that revenue. That would shift the risk from the City to the potential business.

The venue tax (taking 25% of our sales tax dollars) was designed to be only for the golf course. We have developed a means to pull some of that away for parks. But, why do we want to jump through these hoops? Wouldn't it be better to have a general sales tax that could be used for anything in the City, including the golf course if the council sees fit?

In my opinion, the City does not suffer from a lack sales tax revenue but rather a sub-optimal sales tax rate structure that redirects our sales tax away from the essential services. Yes, we cannot compete with the sales tax of retail giants like Selma and Live Oak. But, they also do not direct half of their sales tax revenues to non-essential services.

I have not updated this chart in a couple years, but it should still be mostly accurate. It shows the sales tax rates elected by our neighbors. You can see that the venue tax is very uncommon as is a 0.5 EDC sales tax. An EDC is common but not at 0.5.

Besides the base tax, street maintenance is the next most common sales tax.

Often, I will hear people say that its not property tax dollars going to the golf course. It is important that everyone understand that any sales tax not going to essential services (police, fire, streets) means that the property taxpayers have to pick up the slack. There is a direct link. So, we should be intentional about it. If you think the venue tax and the edc sales tax are important enough to require property taxpayers to pay more property taxes, then let's be clear about that choice.

You have to look no further than the last budget and tax rate that were approved. I requested we reduce our property tax levy by $150,000 so that we would not be increasing taxes. That would require pulling in an additional $150,000 from the venue tax for parks. Because that was defeated, we increased taxes so that sales tax could continue to be available to the golf course.

We should have a discussion coming up about the venue tax and I hope my councilmembers seriously consider the following question:

Why would you want a sales tax dedicated to the golf course (with the ability to pull some away for parks) when you could have a sales tax for any purpose (including the golf course)?