A former Galveston city councilman has renewed calls for a charter amendment increasing the amount the Port of Galveston would pay to the city, after a recent vote to approve a $62 million bond proposition.
“Truthfully, my motivation for starting this again is the bond issue,” Norman Pappous said. “I thought it was unethical for the council to offer citizens the ability to decide on whether money comes out of their pockets, but not allow voters to decide whether money should come out of other citizens’ pockets. Why does the port get special treatment?”
As the councilman for District 4, Pappous in 2016 sought a charter amendment that would have increased the amount the port pays the city each year.
A majority of the city council declined to put that proposed amendment on the ballot, however.
Pappous has created a petition for people to sign asking for a similar charter amendment.
The petition requests the city council to vote to place an amendment on the next charter ballot that would require the port to pay 6 percent of all gross revenues to the city, and that if the port fails to deliver the payment on time, all members of the Wharves Board of Trustees, the port’s governing board, would be removed and replaced by popular vote.
The city’s charter now requires the port to pay the city $160,000 annually from its operating revenue — money that the port has left over after paying for maintenance and operating expenses.
The payment amount was established in 1940, the year the city took control of the port, and hasn’t changed much since. In 2015, the port paid $188,000 to the city.
Pappous, who has worked as a financial adviser and economics professor at Galveston College, said that, adjusted for inflation, $160,000 in 1940 would be $3.7 million paid to the city, in 2015.
Port leaders oppose the idea.
“It doesn’t make sense to begin with, from either a tax or an economic standpoint,” interim Port Director Peter Simons said. “One point is that we are already in a unique situation, unlike a navigation district, in that we have no ability to levy taxes. This would further disadvantage the port, not only requiring us to pay more taxes, but taxes based on gross revenue. No entity or enterprise does things on that basis.”
Pappous argues that the city bought the port in 1945 with the intention that the port would continue to pay property taxes as it had before the purchase.
“The port pays no local, state or federal taxes,” Pappous said. “It can’t even pay 1 percent — it’ll claim poverty. To me, that’s a failed business. I understand leadership says it’s a question of if we want to be in the maritime industry. We have a 75-year history with it. To me, based on the benefits, hell no.”
Port officials have said the organization’s effectiveness should be judged on how many jobs it produces on Galveston Island and the county as a whole, Simons said.
The petition also asks for the city to make a payment of about a third of the amount received from the port to the Galveston Education Foundation.
“I created it late Saturday and it has gotten 20 signatures,” Pappous said. “But over 100 likes. People like the idea, but don’t want to go on record.”
The petition is nonbinding, but if interest in the amendment continues to grow, it’s something Pappous is interested in pursuing further, he said.
“The interest tells me if I do put money into this and others want, we can put it on the next ballot and it will pass,” Pappous said.
The recent $62 million bond proposition passed with a wider margin than many expected. More than 60 percent voted in favor, and about 39 percent voted against.
It marked the first time since 2001 that city officials had even broached voter-approved sale of general obligation debt. The bond sale will allow for designated street and drainage fixes as part of the city’s capital improvement plan, all to take place over five years.
The resulting tax increase from the bond sale will 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.
Residents in 2018 would see a 3.5 cent tax increase on every $100 of taxable property value, according to city documents.