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Metro and the sales tax

Metro chair David Wolff would like to see the portion of the sales tax revenue that gets diverted from its coffers to Harris County and the smaller cities go back to Metro.

Wolff believes METRO can build significantly more if it has access to all of the 1 cent sales tax that was approved by voters when METRO was first established in 1978.

Along the way, 1/4 of this sales tax was diverted to the city, county, and multi-cities for the building of roads. I do not feel this was proper. This money was voted by people of this area for transit, and I think that one of the things that we have to work with the Mayor and the County Commissioners Court over the next five years – this agreement was just renewed in 2009 but expires in 2014 – is restoring to METRO this full one cent sales tax.

Wolff added that this loss of 1/4 of the 1 cent sales tax comes out to approximately $100 million lost annually. He says that this could support about $1.4 billion in bonding capacity “with a 7% constant.” When matched by federal funds, this would equate to about $2.8 billion in new capital, which is slightly more than METRO is spending on the five new light rail lines it is building. “So,” he said, “Metro could double what it’s doing if we’re able to negotiate and work with elected officials to restore our funding over the next five years.”

I’m certainly open to this idea, though I don’t believe either of the Mayoral candidates are inclined to favor it. Nonetheless, I hope it will be on the table when the current agreement expires.

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One Comment

  1. […] conversation happened before the Culberson intervention. Wolff has been talking about the sales tax diversion for a little while now. I personally think the idea has merit, but it certainly won’t happen […]