City of Katy fights sales tax rebate

According to a press release from the city of Katy, the Metropolitan Transit Authority hopes to end or cap its rebates on the general mobility sales tax and use the extra tax dollars for regional mobility projects such as a light rail.

The city claims this would cause digress among budget and property tax rates, so it has put together plan with other Houston-area cities that would allow the cities to keep the general mobility money. The plan will be proposed to the Metro system, and if no agreement can be made, the cities are ready to leave Metro.

The current system provides funding to Metro by giving it a penny out of every state sales tax dollar that gets spent in its service area, the release stated. Metro then gives a percentage of its penny to 14 cities in the Houston area for general mobility projects. Katy gets a half-cent from Metro, which has meant millions of dollars over the last 20 years for paving roads, replacing bridges and building a shopping mall.

With the general mobility rebates in jeopardy, Katy Mayor Don Elder said in the release that other transit projects, including Katyland Drive, Morton Road, Nelson Way, Franz Road and Penderson Road, will be affected.

Elder also said he thinks Metro can cut back some of its own unnecessary spending to get the money it needs, rather than taking it from Katy and other smaller cities.

"If I sound bitter, it's because I am," Elder said. "We have a lot to lose."

In order to show the potential affects of the loss of the rebate, Katy put together a hypothetical property tax rate increase that demonstrates the amount that would be needed to make up the deficit.

"Is this something we're looking to do? No," Katy Treasurer Byron Hebert said in the release. "It just magnifies how important this is. If this happens, it's going to be a struggle for our city … and the other cities, too."

Elder pointed out that Katy and other affected cities have the Texas legislature's support to either keep their rebates or to leave the Metro system if an agreement isn't reached, a move that Elder said would eliminate Metro's sales tax revenue from cities that chose to do that.

"Either they can come up with the plan to work it out with us or we'll see them in Austin," he said.