FIRST DRAFT OF STATE BUDGET WOULD HARM CITIES
The reverse intergovernmental aid article in this issue explains that the State of Texas, unlike almost all other states, provides virtually no financial assistance to its cities. State aid to Texas cities, defined as a grant made by the state to cities from revenue generated by the state, is very rare indeed. Two ways in which the state does provide aid to cities are: (1) a sharing of the state’s sales tax on sporting goods for local parks funding; and (2) sharing a portion of the state’s mixed drink alcoholic beverage tax imposed on bars within the city limits (the revenue from which may be used for any municipal purpose).
The Legislative Budget Board has released its proposed budget for 2012-2013. While there will be significant negotiations and changes to the proposal, several items would negatively affect cities. The proposed budget would slash local parks funding from $36 million to $868,000 for the biennium. It would also slash around $26 million from the city portion of the state’s mixed drink tax. Cities received around $130 million per year in previous state budgets.
Of particular interest to larger cities, the proposed budget would reduce the major events trust fund (a state fund used to help cities attract or keep large events that boost the local economy in excess of their cost to the state treasury) and cut funds used to provide services to the homeless.