Tarleton MPA Nation
I am an MPA Student at Tarleton.
Here is my post and question:
Taxation
So a a topic that I have been learning on appears to be an anomaly to not only Texas but also to seems just the DFW area. That is the Crime Control Prevention District. I lived in the City of Fort Worth from 2007 to 2013. Fort Worth operates a crime control budget for 2017 is proposed at $74,884,251. This money is derived from the 1/2 cent sales tax on purchases made in the City of Fort Worth. That is nearly $75 million dollars. This is money that comes from a regressive tax that appears to add up substantially. This is money that is used, especially in Fort Worth for a wide variety of uses from leasing a new helicopter for the police department to funding after school and parenting programs for youth and disadvantaged parent. Several cities in the area also use this form of taxation for fundraising. If you will pay attention many of the patrol cars on the street today in these communities have a "Funded by CCPD" marking on the trunk. The definition of what qualifies as a crime control prevention eligible program appears to depend on the city. Fort Worth seems to have a fairly liberal definition as to qualifications, but funds important programs that may not get the funding if not for it.
Obviously this sales tax frees up other accounts including General Funds, Police Department Budgets and others. The observation and accountability of these budgets is by a citizen or appointed community panel that appears to be made up of 5-9 members depending on the city that report to the city council.
Here is my discussion piece. If $75 million dollars is pulled separately from the operating budget and is operated as a separate entity for the purpose of the broad subject matter of 'crime control prevention':
1- why are not more cities doing this
2- what pit falls do you potentially see
3- Should there be more knowledge about these tax districts to the citizens as well as input.
Review the Fort Worth budget proposal for 2017 here.
C. Aller
Chris,
ReplyDeleteThis is a great question or, rather, discussion item.
You have hit upon some interesting issues in local public budgeting (and finance).
To understand this issue from at least the Texas experience, one has to understand sales tax laws. The State of Texas has a set 6.25% sales tax. It allows local municipal governments to collect 2% above state sales tax to fund local government. This 2 cents can be broken up a number of ways.
Local Crime Prevention Control Districts are just one of several areas that the money can be spent on; however, the rub is that it is local option (voters decide) and all programs, such as economic development, community development and/or crime control districts. So, if 2 cents has already been allocated to economic and community development, crime control is out of the picture. Voters would have to approve the change.
Some taxing entities, such as Fort Worth, have elected for part of that 2 cents to go the CCPD. These funds tends to grow and have considerable surpluses in them. Plus, cities must be very careful not to rely too much on these sales tax revenues to provide essential services -- police cars, for example. The need may exceed the budget or collections in a slow year.
So, it is all about balance and priorities.
I look forward to other comments shared on this topic.
And, I look forward to having you in MAPA 5315, Public Budgeting for a more complete discussion on public budgeting and finance.
Dr. Cox
So I'm trying to follow the money. When I look at the City of Ft Worth Budget, sales tax is listed under revenue. Can you clarify if the 1/2 cent for this fund is listed in the FTW 2016 budget or is it held in suspense and listed under a separate budget for the CCPD?
ReplyDeleteMaria,
DeleteIt is probably listed as either an enterprise account or in the capital outlay budget.
It will be in the revenue side of the budget. So, look there. No expenditures can be made until they receive (for book keeping purposes) it as income.
If you still cannot find it, give City Hall a call, Finance Office (they may have a budgeting office) and tell them who you are and what you're doing and ask them where you can find the info in the budget.
I am sure they will be happy to help you.
Dr. Cox
I believe this is similar to how Arlington paid their portion of Cowboys Stadium and the same way they want to fund their portion of a domed Rangers stadium. It allows them to allocate their funds to particular projects without increasing the overall tax rate.
ReplyDeleteChadd,
DeleteFor the most part, and my guess is, that they are funding it out of a number of sources -- TIF (Tax Incremental Financing), bonds, and tax dollars.
For TIFs, the city designates an area (usually geographic), in the case the area around the stadium, etc., and all sales taxes collected in that area goes to pay P&I (principal and interest)for improvements, etc.
Government finance is a very complicated thing.
Dr. Cox
I can tell you from experience that one reason more cities are not doing it is the state law on maximum allowable sales tax. Many of the Cities have already "maxed" out their sales tax of +2% on uses like an ECD or MDD. If the Council, and the applicable committees, consider those purposes more important then there is no way to add one of these districts. Even if a community would consent to another 1/2% hike to lower crime, they cannot.
ReplyDeleteV/R,
Robert Evans
MPA student and City Administrator for Comanche, Texas
Chris,
ReplyDeleteThe CCPD appears to be an easy way to raise additional revenue for the Police Department and, by extension, worthy initiatives that further the public safety mission. However, there would need to be a high degree of support for the police department for any city to even entertain such a tax. In 1991 Fort Worth began a robust community policing program where they engaged all segments of the community in problem solving. What followed was a precipitous decrease in crime and an extremely supportive community. The decision to place the CCPD on the ballot in 1995 was after a number of surveys were conducted to gauge citizens' potential support of a special tax. The responses were overwhelmingly positive and the CCPD was voted in by a landslide and has been ever since (every 5 years).
Some of the pitfalls associated with the CCPD are diminishing revenues. This happened during the economic downturn in 2008 and we had to reduce the funding of, or eliminate some programs. Additionally, it would be catastrophic if the CCPD were not renewed. Aside from patrol vehicles, technological advancements, academy recruits, it funds police officer and civilian positions as well. Hundreds of officers would potentially face lay offs if the CCPD didn’t pass and the city didn’t siphon the money from other departments.
As with most things involving government and policy, a small group of informed and engaged citizens influence policy that affects the masses. The information is made available to citizens in myriad ways. There are even CCPD education sessions held in every neighborhood in the city, but very few people attend.
Abdul P.
It is interesting that other cities do not use more funds towards something like this. It seems that law enforcement would be able to purchase more equipment that could make their jobs easier when it comes to arrests (like body cameras). I do think more citizens should be aware of this tax and be able to debate and vote on how the extra revenue should be spent to fit the needs of their area better.
ReplyDeleteAmanda Kennedy
(Advanced Ethics MAPA 5322)