Q: What is the purpose of creating a Municipal Development District (MDD)?
A: An MDD is the legal entity to manage tax revenue. State law requires the citizens to vote on the creation of such a district that would allow the city to increase the current sales tax from 8.0% to 8.25%.
The extra 1⁄4 cent is designed to be used by the city explicitly for economic development and infrastructure projects.
Q: Will the creation of an MDD raise my property taxes?
A: NO! This extra 1⁄4 cent sales tax is a consumption tax and anyone (residents and non-residents) who makes a purchase in League City will pay the extra 1⁄4 cent – for every $100 spent that’s only 25¢.
Q: Why doesn’t our City Council just allocate money for Economic Development out of the current budget?
A: There is no additional funding. Of the current sales tax, 6.25% goes to the state, 1.75% to League City of which .25% is dedicated to the LC Type B Sales Tax Fund for amateur sports.
Q: What other cities in our area have this or a similar plan in place?
A: THE MAJORITY! 97% of the larger cities in the State of Texas take advantage of the extra 1⁄4 cent allowed by law to support their economic development initiatives.
Q: Where does the money come from and currently go?
A: League City currently charges 8.0% sales tax (which many residents did not know). Of this, 6.25% has to go to the state and League City receives the remaining 1.75% for the city. The state allows cities to take up to 2% of sales tax which is what we want to do, increase to 8.25% which is in line with most other cities.
Q: What can the money (additional .25%) be used for?
A: Exactly what League City residents want – Economic Development! The funds are used as incentives to attract business and industry to LC and can also be used for infrastructure improvements and development which will free up funds from the City’s General Fund to help pay down debt.
Q: How much money/revenue is expected to be created the first year from the additional 1⁄4 cent?
A: The estimate is over $2,000,000
Q: How much of this will be paid by League City residents and how much by non- residents?
A: Based on average retails statistics, 60% comes from the residents and 40% from non-residents. However, if you have significant destination/tourist retail and/or attractions (outlet mall, Kemah Waterfront, Top Golf, etc.) the non-resident percentage significantly increases.
Q: Who will oversee this extra revenue for League City?
A: YOU! League City citizens will comprise the MDD Board which will make decisions on projects and priorities based on League City’s Strategic Plan, Roadmap to the Future. This plan was the result of the January 2015 public forum with citizens, the City Council and city staff; during this forum, citizens conveyed THEIR priorities for League City. The yearly budget will be approved by the City Council, however, all other key decisions will be those of the MDD Board.
Q: How much more will it cost me if this proposition passes?
A: Residents and visitors will pay an additional 25¢ on a $100 purchase.
Q: With all the residential growth in League City, why isn’t the additional residential tax funding enough?
A: Because with additional residential growth, comes more infrastructure, staff and service requirements from the city – better roads, city services, and amenities – to maintain the quality of our city. Funding required to pay for these services is significantly more than the income resulting from additional residential taxes. We need to “balance the stool” and REDUCE the tax burdens on our residents.
Q: Is this simply a gimmick or “shell game”...reducing taxes in one area (city taxes) and increasing taxes in another (sales tax)?
A: No! The taxes are completely different and the areas of reduction are exponentially more impactful (reference the SWAP calculation) than the sales tax increase. Additionally, the sales tax is shared by non- residents, further reducing residential tax burdens.
How Can You Help?
► VOTE ON NOVEMBER 3!!! Make sure you, your friends and family living in League City VOTE TO SUPPORT this proposition! Votes are required to pass it!
► GET INVOLVED IN THE EFFORT! WE NEED VOLUNTEERS! Communicating the facts about this proposition is extremely challenging:
- NO ONE likes to hear about taxes...folks immediately tune out before they hear how this can actually help to REDUCE their current tax burdens!
– There is significant misinformation that has been communicated in the media and in other public forums about the sales tax increase – why it is needed, what it will be used for, and how it will be managed – we need to challenge and correct the misinformation and provide the facts!
– Individuals do not like the idea of using “incentives” to lure commercial and industrial development to our city, however, just because we don’t like it... doesn’t mean we shouldn’t do it. We MUST increase commercial and economic development in League City...it will benefit ALL RESIDENTS!