GALVESTON — One year after island voters approved the 20-year extension of the half-cent 4B sales tax, the city council has yet to spend any of the funds.
Voters overwhelmingly approved the extension in November 2008, less than two months after Hurricane Ike devastated the city.
Officials predicted the tax would generate $4 million a year, to be divided equally among infrastructure, beach reconstruction, parks and economic development projects.
Some of that money must be used to make bond payments on debt issued when voters first approved the tax in the mid 1990s. The remaining bonds will not be retired until 2014.
The tax extension went into effect April 1. It so far has given the council $403,308 to spend, after taking out this year’s bond payment.
Several months ago, the council discussed using some of the parks allotment to pay for a tree replanting program. Other than that, council members have not proposed spending any of the money.
City Manager Steve LeBlanc said he likely would suggest using the portion set aside for beaches to extend the state’s reconstruction project.
Later this year, crews working for the Texas General Land Office will start widening the beach by 200 feet between the western end of the seawall and about 13 Mile Road.
When the council decides to spend the money, it likely will choose to issue bonds, paid for by the tax revenue, as a previous council did 15 years ago, city Financial Director Jeff Miller said.
Any use of the sales tax must be approved by the Industrial Development Corp., a council-appointed board that oversees the revenue.
The group’s recommendations finally must be approved by the council.
The corporation board has not met once in the last year.
