Civic leaders pen letter to comptroller's office

With a looming threat, the City of San Marcos could lose millions of dollars in sales tax revenue by proposed rule changes made by the Texas Comptroller's office. San Marcos civic leaders have banded together to issue a statement saying – not so fast.

In the letter from the San Marcos Area Chamber Commerce, and similar remarks from the City of San Marcos and the Greater San Marcos Partnership, leadership is stating its concerns about proposed tax code changes, which would redirect where sales tax revenue goes for online sales.

“On behalf of the San Marcos Area Chamber of Commerce, representing more than 700 investors employing over 36,000 people, I am reaching out to you today with great concern to oppose the proposed changes to the distribution of sales tax revenue of online sales in Texas," Jason Mock, president and CEO of the San Marcos Chamber of Commerce, wrote. “The implications of redistributing these tax dollars away from the communities who currently rely upon them will create a direct and long-term negative impact on the quality of life of our residents. In addition, we oppose the proposed language that severely limits sales tax rebates under Chapter 380 of the Texas Local Government Code.”

The coalition said the intent of the proposed changes may be to “level the playing field.”

“However, these changes are likely to shift a higher proportion of sales tax revenue to larger and wealthier markets like Austin who have a higher medi an household income and more disposable income than smaller markets like San Marcos,” the group said. “According to the U.S. Census, Austin and San Marcos have median household incomes of $67,462 and $37,593, respectively.”

The letter to Comptroller Glenn Hegar said in 2016, Best Buy E-Commerce located to San Marcos creating 40 new jobs and significant eco-nomic impact for the region. A Chapter 380 agreement was instrumental in securing the company, providing reinvestment rebates to Best Buy and much needed sales tax revenue for the growing city. San Marcos was ranked as the fastest growing city in the U.S from 2012-2015 and is located in the fastest growing county in the nation with populations over 150,000, according to the U.S. Census Bureau.

“The proposed changes are expected to generate a net loss of $3.5 million to the City’s general fund budget of $89.9 million in FY2021,” the letter read. “City council will be forced to reduce funding for social services, park upkeep, street repair as well as other programs and service that enhance the quality of life in our community. Without ample time to conduct a thorough review of the businesses that will be impacted by the proposed changes, it is impossible for our community to fully realized the potential financial losses and other unintended consequences.”

The State of Texas has continued to sustain record-breaking economic growth and job creation due to its strong reputation for providing a business-friendly environment. The proposed changes will void the Chapter 380 agreement the City of San Marcos has with Best Buy and many others across the state, the coalition wrote.

“This moment could be remembered as a significant point in time when Texas went back on its word and became a lot less business friendly,” the group said.

lwinter @sanmarcosrecord.com Twitter: @LanceWinter