Real estate market values have recovered, and the previous Galveston City Council’s implied deal to provide tax relief in exchange for a temporary 6-cent tax increase should be honored.
Revenues exist to provide at least 2 cents per $100 of assessed value in tax relief if just Tax Increment Reinvestment Zone 11 is brought onto the tax rolls instead of being allowed to continue.
The developer wants the deal expanded, but the new plans deviate from contractual promises. Ending TIRZ 11 would annually convey more than $500,000 to the city’s coffers.
Another Galveston tax increment deal allows the owners of high-end historical properties to fix the property’s value for a specified period of time in return for restoration at financial levels that are, realistically, available only to millionaires.
No such tax increment deal is available for the middle-class homebuilder who takes a local blighted property and sinks $50,000 into it. That person has to pay taxes in full — year in and year out.
No credible financial study was ever done to prove these tax increment deals would, or do, provide justifiable financial benefits to the Galveston taxpayer. Still, it is not hard to figure out who benefits most from these deals. The idea that they are needed for economic development purposes is unsupportable.
We are reminded on a yearly basis that Galveston has more jobs per capita than most any other city of similar size. Economic growth is Galveston’s challenge, not economic development.
Down the coast sits Port Aransas. Port Aransas has many attractive developments yet, unlike in Galveston, no developers were allowed access to such deals.
Port Aransas told the developers they had to fund the required infrastructure themselves. If the developers didn’t like the terms, they could take their business elsewhere — no hard feelings. In some cases the developers even installed the roads at their own expense. Both economic development and economic growth occurred in Port Aransas without any such deals.
Clear-thinking individuals should wonder why Galveston’s leaders have created these tax increment zones. Galveston sits one hour from the fourth largest city in America, has a rich history, and is a top tourist destination. Yet Galveston is so undesirable that we have to tempt developers while Port Aransas dictates to them?