With less than four weeks until the start of early voting, debate is heating up over Galveston’s $62 million bond proposition.
The election is the city’s first attempt in nearly 15 years to issue general obligation debt, a type paid by the city’s tax rate rather than user fees. If the proposition passes, proceeds from the bond sale would go toward capital improvements to the city’s streets and drainage.
But as the election approaches, opponents have become more vocal. At the center of their argument is a 3.5 cent increase in taxes on every $100 of taxable property value. The increase would cost the owner of a $215,000 property — the median value in Galveston — an extra $60 a year in property taxes, according to city estimates.
Opponents argue the city is already supposed to be using its tax dollars for road maintenance and that a bond shouldn’t be necessary.
“They already receive funds to do that, so why are we paying twice for the same service?” said Sandra Arnold, 41, of Galveston. “You’re already paying for this in your tax dollars.”
“Can you imagine going into a restaurant and paying for your meal and you go out the door, and they say, ‘We’re going to ask you to pay twice for that?,’” she said.
City Manager Brian Maxwell has argued that the purpose of the bond is to fix Galveston’s roads and drainage in five years, as opposed to the 15 years to 20 years it would take to service the roads with a “pay-as-you-go” method.
“They’re not paying for it twice, they’re paying for it sooner,” Maxwell said.
Arnold, who owns several rental properties on the island, said she’s seen property values increase significantly over the past few years and knows a tax increase would hurt her tenants, most of whom, she said, earn less than $25,000 a year.
“Most of the time they don’t have a voice because they’re too busy taking care of business,” Arnold said. “That is my clientele, exactly the ones not needing a tax increase.”
Opponents of the bond issue have also questioned the true cost of the infrastructure improvements. Although the bond sale and actual improvements will cost $62 million, interest will compound actual payments to more than $80 million, city officials said.
If the bond sale passes, the city will lock in the current interest rate. That rate would be better than that of construction inflation, Maxwell said.
“As much as everybody thinks it’s a decision about the city raising taxes, it’s really an economic decision,” he said. “I think not passing the bonds is much higher to the average taxpayer.”
The city is also using money from its general fund to offset the money used in the bonds. Up to 8 percent of the city’s general fund will go to infrastructure and paying off the debt from the bond, Maxwell said.
Fixing the roads in a shorter period of time will be a financially better decision for the taxpayers, Maxwell said.
“I’ve been those guys; I’ve sat on the other side of the table and said ‘I don’t want to pay for that, that’s crazy,’” Maxwell said. “However, I can see the long-term gain. The city will be in much better shape.”
Arnold’s husband, Hud Hopkins, former director of the city’s Scholes International Airport, said he would still rather see the city use the pay-as-you-go method.
“Redoing a road, an existing road that I’ve already paid my taxes on, it gives me a lot of heartburn paying for it again,” he said.
Arnold and others still aren’t certain they want the city handling more of their tax dollars.
“My biggest piece is what are you doing with the money you’ve already gotten?” Arnold said. “I don’t want us to get hoodwinked.”
Election Day is May 6. Early voting will take place from April 24 to April 28 and May 1 to May 2.