On November, 4th voters will decide if they agree to the same sales tax increase. Lubbock city council members have proposed to raise the sales tax 3/8 of a penny, bringing the sales tax to 8.25.
While 2/8 of a cent would go toward lowering your property taxes, 1/8 of the tax would go toward economic development. So what does that mean and what happens to Market Lubbock Inc?
|Sales Tax Increase Voters Ballot|
Right now, Market Lubbock Inc. is funded through the city's water, sewer, and garbage fees. If voters pass the sales tax, Market Lubbock Inc. will become a state, regulated corporation called a 4A corporation. City Councilman Tom Martin says this tightens the belt on how Market Lubbock Inc. can spend your tax money.
|Early Voting Locations for Sales Tax Special Election|
Market Lubbock Inc.'s sole purpose is for economic development, like creating jobs, helping businesses grow. According to Martin, MLI has created more than 5,000 jobs since it was established in the1990's.
However, not every piece of candy is as sweet as it looks."One of the criticism that I've heard over the years of our economic development activities has been a number of issues as to why the city or MLI funded that particular venture," said Martin.
If voters pass the sales tax increase, MLI will be restricted under state tax laws on what your tax money can be used for. Martin says under the 4A corporation tax laws, tax money can't be used for "risky" deals.
One Martin mentioned was Flemming Foods. Two years ago, MLI provided $3 million to Flemming to retain its current jobs. Flemming closed it's doors last May.
According to Martin, a business like Tyco would be eligible to receive economic development under the 4A corporation tax laws. Because not only would the money be used for creating new jobs, but for new infrastructure.
"You've seen Tyco, we provided the sewer lines assisted with the building of the facility and in return they've created several 100 jobs and they said they'll continue to add to the employment base," said Martin.
The purpose of a 4A corporation is to provide money to businesses who guarantee new jobs. And before the money is handed out from a 4A corporation, a thorough background check on the business will occur so you're tax money doesn't go down the drain.