The 4B Sales Tax is a reallocation of one eighth of a cent of sales tax dollars, Allen said. Each eighth of a cent would then be put into an economic development fund, which would turn into nearly $300,000 per year that wouldn’t go into the general fund.
“The city will lose $300,000 in revenue,” Allen said. “We are prepared to cut back and absorb that for a couple of years, because we believe that when it opens up, we will be doing fine.”
Last year, Mineral Wells had nearly $250 million in taxable sales. Allen projected if Mineral Wells accrued $275 million per year in sales, it would levy the the $300,000. When the Baker opens up, it is projected to single-handedly raise the majority of taxable dollars to levy the reallocation, Allen said.
“We are going to have to tighten our belt at the city, but $300,000 isn’t near what we had to do six years ago with $2 million, and we did that without cutting services, without layoffs, without furloughs, [while] giving you the services that you need.”
Patton expounded on the matter by explaining that the $300,000 doesn’t really go away, it simply gets reallocated to the 4B economic development fund for the city to use on various projects within the fund’s guidelines.
“There are a couple of options that the city will have after that $300,000 gets re-appropriated to the economic development fund,” Patton said. “Option one, the option we are asking for, is that that first $300,000 goes towards the service of debt on bonds ($4 million in all) that would be floated in order to support the Baker Hotel. But any additional dollars that are generated can be used for any other economic development program that Mayor Allen has identified per the 4B statutes.
”Even if the Baker Hotel restoration project falls through, the economic development fund does not go away and can be used for other projects within the city. If it is decided that the fund is no longer needed, it will be put to a public vote to repeal the motion.