The city of Lake Dallas has called an election to dissolve its Economic Development Corp. so that the sales tax money used to fund it can be used to lower property taxes and repair streets and sidewalks.
City officials say that dissolving the corporation will save the taxpayers money and allow road and sidewalk maintenance to be completed sooner and on a larger scale.
“Like any community, we’re always challenged on how we can better spend our tax dollars,” said James Harper, who serves on the boards of the EDC and the Community Development Corp. as well as the City Council. “[The EDC] is an inefficient use of tax dollars.”
In 2003, the EDC was created to promote growth in Lake Dallas, a small community of what is now 7,500 people, by restructuring the local economy to enhance the economic well-being of residents. It was developed as a way to help attract businesses into the area since Denton County was experiencing a population explosion.
The EDC funded projects such as manufacturing and industrial facilities, research and development facilities, military and recycling facilities, warehouse and primary job training facilities and distribution centers, and regional or national corporate headquarters.
But the economic downturn of 2008 led to a huge drop in sales tax revenue, Harper said, and the city is still recovering.
One way the city tried to recover was by restructuring contracts with vendors to save money as well as halting raises for employees to avoid cutting benefits and services to residents.
Lake Dallas has the highest property tax rate for a city in the Dallas-Fort Worth area, Harper said, and the city wants to find a way to lower property taxes.
“We’ve only been able to lower taxes about a penny in the last six years,” he said. “Now we’re trying to figure out how to move forward.”
Luckily, the sales tax rate, Harper said, has been increasing for the past three years, providing record revenue for the city.
The EDC currently receives one-half of 1 percent of the sales-and-use tax that equals approximately $350,000 per year and provides grants, loans and other forms of financial incentives for industrial economic development.
But the main reason for abolishing the Economic Development Corp. lies in the Community Development Corp. (CDC), a similar board of volunteers that funds the same projects as the EDC as well as parks, roads and private ventures.
Joni Vaughn, the city secretary, said the city is simply looking for a way to deal with the issues of high property taxes and poor road conditions.
The council, she said, feels the best solution is to reallocate sales tax dollars from the “Type A” EDC to a property tax reduction fund and a street maintenance and repair fund and use the “Type B” CDC to fund the economic-based projects similar to Corinth, a city that uses its Type B corporation to fund economic-based ventures.
“It makes more sense to keep our Type B corporation and dissolve the Type A and reallocate those sales tax dollars for better use,” Vaughn said.
But the decision to dissolve the EDC will be up to the voters who will cast their ballots Nov. 4.
CHRISTIAN McPHATE can be reached at 940-566-6878 and on Twitter at @writerontheedge.
