In a misguided attempt at tax relief, the Texas Legislature is moving to impose dramatically low revenue caps on cities. State legislators are advancing House Bill 2 and Senate Bill 2 to impose a 2.5 percent cap on annual property tax increases.

If a city were to increase taxes more than 2.5 percent, an automatic rollback election would occur in November. If the increase weren’t approved in the election, the budget would return to the rate set one year earlier — a risk no city could afford to take.

This “cap” would make it impossible for cities and counties to maintain existing services. Items such as additional police officers or street maintenance, so badly needed in a tourist destination like Galveston, will become an unaffordable luxury.

Tourism, the lifeblood of Galveston Island’s economy, significantly contributes to the state’s economy as well. Galveston is home to a population of just over 50,000 residents at night, but wakes up in the morning to an average population double that amount due largely to a flourishing tourism industry.

Galveston hosts 7 million tourists a year, and is home to the fourth largest cruise line port in the nation. But tourists don’t pay property tax to the city.

We cannot manage tourism without being able to provide basic services.

According to the city’s fiscal year 2019 adopted budget, public safety (including police and emergency management services) and infrastructure (streets maintenance, traffic, and drainage services) amounts to 73 percent of the general fund budget. These general-fund supported city services are essential for our residents, but are severely impacted by the millions of tourists who visit our city each year.

If the legislature insists on imposing revenue caps, it must allow exemptions for public safety, roads and other basic priorities that the city and state share. HB2 and SB2 have no such exclusions. Just in Galveston, these bills would create budget deficits impossible to absorb without public safety cuts.

Had a 2.5 percent cap been in effect since Hurricane Ike, the current year’s revenue loss would have translated into over $4 million less for police, fire and public safety. Staff reductions would be a certainty, including reductions in police and fire.

There would be $1 million less for street, drainage and infrastructure maintenance and improvements, and $1.6 million less for code enforcement, general government, parks and critical functions that are fixed in their very nature.

HB2 and SB2 endanger the financial future of our city. The history of Galveston is one of fiscal responsibility. It’s built into our city charter. We don’t need arbitrary restraints created by the legislature and placed on our budget process. Revenue caps are bad for the people of Galveston, especially without exemptions for public safety and other necessities.

Contact your legislators and state leaders. Tell them to oppose tax caps. Or at the very least provide exemptions for public safety and basic needs.

Jim Yarbrough is mayor of Galveston.

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(23) comments

Rusty Schroeder

I think any cities that are affected by these bills would do some belt tightening and a little fat cutting before threatening decreased road and drainage maintenance. I also doubt local legislators phones will be ringing off the hook today or tomorrow asking for higher property taxes instead of a cap on them.

Bailey Jones

The right to levy taxes is the most basic function of government. Once again our Austin interlopers are pushing their agenda down the throats of local democratically elected governments, robbing Texans of their most basic right - to govern themselves.

Byron Barksdale

Grand Cayman Island: (1) same population, (2) dependent on tourism, (3) very clean streets, (4) lower serious crime, (5) recovers quickly from hurricanes PLUS zero annual property taxes.

Bailey Jones

Don't forget offshore tax haven for most of the largest banks in the world. $1.5 trillion in secret cash - woohoo! Maybe that's the model for Galveston's future.

Don Schlessinger

I wonder how many illegal aliens Grand Cayman Island has had to support, how large their teaching medical school is, and what percent of their population is living in public housing?

Gary Scoggin

Yes. There is a good lesson here. The Caymans are responsibile for setting their own tax rates and are not constrainged by politicians in Austin.

Gary Scoggin

Our governor and lt. governor can't stand local control of anything. I hope our legistlators remember that they represent the people here and not them. Please give us credit for being smart enough to figure out what tax rate is appropriate for our needs.

Rusty Schroeder

Gary my guess is most don't want higher property taxes, so they are listening to the people here. I didn't want a COM bond and it was approved, not 1 time have you heard me complain about it since it happened. In fact I congratulated them and hoped they keep their word. Every time something from Austin, the entire state in this matter, you complain about Abbott and Patrick. Guess what, the election was in November, they were elected by the citizens of Texas for another 4 years as was Sen. Cruz. If you are so unhappy, California awaits you with open arms, because their citizens are fleeing to Texas. Why you ask ? Uncontrollable taxation has made their state too expensive to live in.

George Croix

They haven't done that in my lifetime, Gary....been hat-in-hand for handoiuts that whole time.
The tax rate appropriate to the needs is the same as the income appropriate to pay one's own bills.
Isn't it?

Gary Scoggin

George, you are right. And in local government, revenues must balance expenses. Setting the tax rate to cover costs is the way people pay for the government they demanded. And Rusty, although California is a nice place to visit but I wouldn’t want to live there, I am not necessarily in favor of higher taxes. I’m just in favor of local control whenever practical. Be it rentals, tree trimming, Harvey Recovery, or taxes, our Governor continues to show he doesn’t agree with that.

Paul Hyatt

There are certain groups of politicians who have seen a tax that they did not want to raise or something new that they did not want to tax. Some time there has to be a point where the taxes STOP going up for a period of years. Even when the taxes are not raised the property values are constantly being raised which means more money that they people can spend. When you are on a fixed income either one hurts.

Ron Shelby

Paul. If your on a fixed income, your most likely retired and likely over 65. If your over 65 you can choose to freeze your value on your homestead. Combine that with most politicians like to show a rate decrease each year, and your taxes go down. No problem being on a fixed income there. You do well. If its a rental or vacation property...well that's the problem of the top 10%.

Jarvis Buckley

Don- I noticed no one directly responded to your comment. In my opinion you hit a bullseye. Great comment right on Mark . I'll bet Big
Jim read it twice. Keep your comments coming.

Bill Broussard

Correct Jarvis and what our mayor misses is that there are two drivers fueling his angst both of which were not mentioned: one is that our generous tax cut eliminated both real financial losses and set the ceiling on city/state tax deductions at 10,000.00. Of course taxes are driven by appraised value so if your taxes aren’t at or above the ten k limit they soon will be and you can no longer get any federal tax credit for overage plus he’s worried about having enough money to pay all that bond debt he tied us to and still have enough play money to add a brand new annex on city hall.

Please someone—anyone—point me to all the narrative in the editorial concerning the residents cause I can’t find much but I sure can find a lot of concern for the tourist

Ron Shelby

Remember that Grand Cayman is not a city: It makes its revenue from huge import taxes, Work Permit fees, Alcohol, Tobacco and Gas Taxes, Company Registration Fees, Various fees to banks/trusts, Land Transfer Fees, Tourism Fees, Regular Government Service Fees, Rental fees and other sales taxes. Nearly all of which is absolutely not available to a local government under Texas statutes (and in some cases not even to the state). Grand Cayman is in no way a decent comparison, and as for illegal immigrants, its easy to control that if your an island nation way out in the middle of the Gulf or ocean.

Michael Moriarty

Spoken like a true politician, Jim!

Perhaps along with this proposal should be a limit on government budgets. I have about 10 houses for sale, most for nearly six months or more and none are moving. Appraisals, overall, seem to be higher than what the market would dictate. Would someone knowledgeable of the county's real estate market care to address whether homes are selling and the sale price in relation to the tax value?

Leigh Cowart

"Misguided attempt at tax relief?" I vote NO everytime and will continue to do so. I am sick of being overtaxed every year to the point I may have to eventually sell to be able to afford to retire and pay my medical bills. Get back to the drawing board, get creative, figure out how to remain loyal to the people that live and work here and be fiscally responsible with our tax money. Do the job you've been elected to do and quit spending money you don't have and on projects that were promised and money diverted. I can't come up with anymore funds to host tourist and if you keep inviting them here you better dam well afford to feed, house them, provide entertainment and park their cars! At some point this poor 'ole Island may just have to hang a "no vacancy" shingle ...

Wayne Holt

This is a very interesting discussion to segue into after the article of a few days back when some commenters excoriated the Park Board for mentioning resident priorities. It also is a prime example of what I was trying to express then: we (the residents) seem to be on a hamster wheel when it comes to 1) taxes to pay for 2) infrastructure so that 3) more tourists can arrive here and spend money 4) that we have to use to keep up with the demand all those tourists make on local infrastructure and quality of life issues. Even HOT revenue is dedicated to promoting that process as far as the eye can see.

I don't blame the mayor as this is often the response of any community like Galveston that has made tourism such a critical part of its economic well being. But at some point, it has to become apparent that we are trying to lift ourselves up by our own bootstraps. It stems from a very American character trait that we all share to some extent, and that is more means better.

Well, perhaps it is time to re-examine that proposition in many areas of civic life. The truth is, it is getting to be unaffordable to live in many places even modestly. Do we want to continue to accept, without real soul searching, the proposition that we just HAVE to constantly increase the rush of those who, as the mayor says, pay no property taxes...and too often are just "in port" for a good time?

This is not an easy question and the mayor and council, of course, are on the hot seat to deliver everything to residents AND tourists with as little pain to us as possible. But a willingness to step back and try to re-imagine how this community can succeed without becoming another Coney Island might be welcome by a surprising number of Galvestonians.

Michael Byrd

It appears we are in good company.
Hawaii at a 'tipping point' of overtourism, travel experts claim

https://www.foxnews.com/travel/hawaii-at-overtourism-tipping-point-according-to-travel-experts

Explore the Fox News apps that are right for you at http://www.foxnews.com/apps-products/index.html.

Wayne Holt

Thanks for that link, Michael. For those who didn't follow it, a few highlights:

"Despite a string of record visitor arrivals now totaling almost ten million annually, Hawai‘i tourism shows signs of trouble,” the paper begins. “Inflation-adjusted spending per visitor has trended downward. Diminishing economic contribution, eroding resident sentiment, and increasing congestion and stress on sites and attractions provide evidence that the current governance model is inadequate for effectively managing the increasingly complex issues facing Hawai‘i tourism.”

PLEASE NOTE: A study commissioned by the Galveston Island Convention & Visitors Bureau reported that 6.5 million travelers visited Galveston in 2016, an increase from 2015's 6.4 million.

AND: There was a five-percent increase in the number of Port cruise travelers from 2015 to 2016, where embarkations rose from 837,000 to 877,000.

Think what that means. Here it is 2019, we are very likely near 900,000 embarkations leaving from Harborside and 25th St and the push is to expand cruise departures. That means an equivalent of 10% of Hawaii's entire annual visits to all islands hangs out by the Railroad Museum until they can roll their bags across the road. And we are probably at 70% of Hawaii's entire visitor count of all islands just coming onto our one small island.

Does anyone here see the issue with the idea that more tourism is the answer to our problems?

Charlotte O'rourke

Wayne,

Lol.

There was a lot of laughter around town that the PB was advocating against tourism, and insisting private companies (only at the port ... not the ones sitting on its Board) adhere to the PB business model.

Anyone with understanding of Galveston politics understands the reason why this occurred, and it is not the underlying interests of residents.

There are 297 ship calls and about 900,000 passengers. Many come by bus, some stay at hotels and shuttle, and the rest come in cars with multiple passengers. So really, if you do the math you are looking at less vehicles than car ps that travel to UTMB. Compare that to the 250,000 for big events promoted by the PB.

The port is working on a plan to divert the traffic of the 2 current terminals onto port property.

With that said, I think you can have too much of anything: tourism, big events, population, cruise terminals, or anything else.

No cap comment, I don’t know enough about the topic to have an informed opinion.

Wayne Holt

"With that said, I think you can have too much of anything: tourism, big events, population, cruise terminals, or anything else. "

Charlotte, you have encapsulated the point in that one sentence. Anyone who is objective will admit the importance of tourism, the port, cruise lines, promoted events, etc. But just being willing and able to stand back from the idea that "all tourism=good" and see that other effects generated by tourism will need to be addressed is progress, IMHO.

I have heard a lot about the Park Board being anything but resident-focused. I defer to you and others who have said as much and have been involved in Galveston's civic life for many years, certainly more than I have been. I can only speak regarding my own experience with the Board, which has been positive and pro-resident, even surprisingly so. I found Board trustees to be willing to listen to a definitely non-tourist/non-corporate point of view and respond to it.

Speaking of big events: I will be back addressing the Board soon regarding elements of the Lone Star Rally that need their attention, I believe, and will see if their previous openness in listening to resident concerns continues. Ever the optimist, I am hopeful they will fairly consider the issues and will try hard to come up with something that is responsive to all parties to the rally, whether City, promoter, visitor or resident.

Charlotte O'rourke

Wayne, good for you. I believe in everyone’s first amendment rights being exercised frequently.

Tourism is good for the Island .... too much tourism - even historical or ecotourism -can be bad.

But saying the 6 million tourists generated by the PB in mostly summer and weekend months and big events are good tourism and the 900,000 by the port spread out over the week and year is bad tourism, well ..... Galveston select special interests at work.

Welcome to the discussion.

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