Page 449 - Hurst FY19 Approved Budget

COMMUNITY SERVICES

HALF CENT SALES TAX FUND

The Community Services Half Cent Sales Tax Fund is a Special Revenue Fund established
to record receipts collected by the State for a one-half percent sales tax on taxable items
sold within Hurst. The tax was authorized by voter referendum on January 16, 1993 by
a three to one margin.

Previously, in 1991, the State Legislature had approved an amendment to the
Development Corporation Act of 1979 (Article 5190.6, Vernon Civil Statutes) to allow
qualifying cities to impose, with voter approval, an additional one-half cent sales tax
for projects as defined by 4B of the Act, primarily Parks and Recreation projects, if their
sales tax rate at the time of the election does not exceed 7.25%. Commonly known as
the “Arlington Stadium Bill,” the legislation was a special law that only applied to cities
in counties with a minimum population of 750,000 - Tarrant, Harris, Dallas, and Bexar.
The legislation was important to Hurst because the city had over $14 million of deferred
parks and recreation projects that were unfunded. Of primary significance, the tax was
viewed by the City Council and City Staff as an opportunity to ensure property tax relief
to Hurst citizens. Due to voter approval of the legislation, the new Community Services
Half Cent Sales Tax provides facilities and infrastructure improvements that would
normally be funded by the General Fund or not financed at all. Revenues from the sales
tax will also pay for debt principal and interest cost for Revenue Bonds issued under
Section 4B of the legislation. The capital budget for the Hurst Community Development
Corporation Bond Fund is located on page 387 - 391 in the CIP Section.

A major consideration was the impact of the new tax on the City’s current General Fund
operation’s budget with the addition of new facilities and programs. Since there are two
main components of any large capital project, the construction costs and the ongoing
maintenance and operation costs, there was concern that provision for maintenance and
operation costs were left out of the original legislation. During the Seventy-Third State
Legislature session, the City of Hurst Mayor, City Council, and Staff were instrumental in
working for the passage of H.B. 2297 (originally H.B. 1177) that allows the expenditure
of Section 4B sales tax on the maintenance and operations costs of publicly owned and
operated projects that are purchased or constructed with the proceeds of the sales tax.
This amendment to Section 4B of Article 5190.6 provides significant benefits for all cities
in the State that have enacted the tax or will enact the tax in the future.

After passage of the tax, the Hurst Community Development Corporation was formed
and is comprised of four City Council members and two citizen members. By-laws for

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