• July 10, 2014

Cove council to discuss opposing House bill

Proposal gives state’s 100 percent disabled veterans, families exemption from sales tax

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Posted: Sunday, March 3, 2013 4:30 am | Updated: 10:58 am, Mon Feb 17, 2014.

COPPERAS COVE — The City Council will discuss Tuesday opposing a proposed Texas House of Representatives bill that helps disabled veterans but has a negative financial impact on city coffers.

House Bill 1162 calls for 100 percent disabled veterans, surviving spouses and members of their households to receive a complete sales tax exemption, according to a draft of the bill. It was introduced by Rep. Ed Thompson, R-Pearland, in mid-February and is being reviewed by the Ways and Means Committee. To get the exemption, veterans have to apply with the comptroller’s office and receive an identification number.

“There is nothing wrong with the goal, taking care of our 100 percent disabled veterans,” said Coryell County Judge John Firth. “The issue is, however, that this is another unfunded mandate.”

The Texas Legislature should spread the burden of cost of these tax exemptions instead of having the communities where these veterans live carry the majority of the weight of such a law, Firth said.

“Copperas Cove has the highest percentage of 100 percent disabled veterans (per capita),” Firth said.

The burden is almost triple for local entities with high veteran populations, such as Copperas Cove, compared to other parts of Texas, he said.

“Honoring our veterans is a privilege every day in the City of Copperas Cove,” stated a drafted letter of opposition from the city. “However, state legislation of this magnitude is making serving our heroes harder without spreading the support to our veterans statewide and nationwide.”

The letter, written to House Rep. J.D. Sheffield, R-Gatesville, and created by city staff, stated Cove is estimating the proposed tax exemption could mean a reduction of about $100,000 in annual revenue.

“Sales and use tax is the second largest revenue generator for the city of Copperas Cove, and it will significantly impact services required by local residents, including disabled veterans,” the letter stated.

The 100 percent disabled veteran property tax exemption already has caused a reduction of about $370,000 in Copperas Cove, stated the letter.

Downward spiral

City Manager Andrea Gardner said such losses in revenue have helped contribute to leaving several city positions unfunded during the last four years.

“This could get worse and possibly even cause the city to seriously consider eliminating some services to residents,” Gardner said.

There are 479 households currently claiming the property tax exemption in Copperas Cove, stated the letter. According to the Coryell Central Tax District, there are 672 homesteads throughout the county claiming the exemption.

Bell County also has a high number of 100 percent disabled veterans and spouses claiming the property tax exemption: 2,447, said Marvin Hall, with the Tax Appraisal District of Bell County. And there are more signing up monthly.

Killeen perspective

In Killeen, more than $1 million of potential revenue was exempt because of the 100 percent disabled veterans regulations, according to the city.

While the property tax exemption created greater losses for Killeen than Cove, Killeen Mayor Dan Corbin said the possible sales tax exemption for veterans is a burden Killeen could bear.

Killeen is already feeling the pinch of several government mandates more than other Texas cities, such as free parking for disabled and decorated veterans and former prisoners of war at airports, Corbin said.

“But that is not the issue, the issue is, should we pick up the slack for others?” he said. “I think we should.”

Corbin, however, also said Killeen is already operating on “bare bones” budgeting and if another exemption gets passed, the city could be faced with some difficult decisions. “If one of those (revenues) gets cut, then we have two choices: either reduce programs or raise property taxes,” Corbin said. “We could cut police officers or raise taxes.”

If Killeen decided to cut services, it would affect everyone, including the veterans the exemption is trying to help, Corbin said.

Other options

When revenue for cities gets even tighter, they may stop helping fund programs like meals on wheels or senior center programs, Firth said. Or perhaps, it prevents cities from building a park or hiring police officers.

In Copperas Cove, Gardner said it is unlikely the city would make cuts to public safety, but it could mean those services become delayed because of funding constraints.

“We need to be caring for everything we can be for our 100 percent disabled veterans, but we need to do it in a way that doesn’t hurt the very community they live in,” Firth said.

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