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Posted on: February 5, 2020

City Corner Column: Victoria Sales Tax Development Corporation: Promises made, promises kept

Gilbert Reyna

The clothes you just bought are helping to pay for road repairs, recreational facilities and a wide variety of other projects that help make Victoria a better place to live and work.

On Jan. 27, the Victoria Sales Tax Development Corporation will gather for its first meeting of the new year. They’ll be discussing their budget for fiscal year 2020, including the possibility of prioritizing repairs on Airline Road after several water main breaks in the area.

It’s all in a day’s work for an organization that was founded more than 20 years ago on promises of fiscal responsibility and commitment to economic development—and the corporation has delivered on those promises.

The Sales Tax Development Corporation was born from an understanding that the city needed to do more—more to repair its crumbling infrastructure, to improve quality of life, to attract newer and bigger businesses to pad out the tax rolls. The solution was straightforward: The city would raise sales taxes by half a cent on the dollar, and the revenue generated by this tax (known as Type 4B revenue after the section of state law that governs it) would be earmarked for economic development projects. The measure would also create a new organization to determine how the funds would be used.

It’s no secret that raising taxes is a tough pill to swallow, and residents are often reluctant to approve tax increases even for the best of reasons—yet the creation of the half-cent sales tax and the Sales Tax Development Corporation passed with about two-thirds of the vote. It seems voters are more willing to support a tax increase when they know the funds generated will be used as intended.

Similar to Hotel Occupancy Tax funds, Type 4B revenue legally must be used for a specific purpose: in this case, economic development. Since its inception, the Sales Tax Development Corporation has used this revenue to spur various projects that have made our city more attractive to businesses and to people looking to move here.

Among the corporation’s most notable achievements is the industrial park on Lone Tree Road. Funded mainly by Type 4B revenue along with a federal grant, the new development was instrumental in attracting Caterpillar, which remains a key employer and source of tax revenue for the city. The corporation also provides funding to the Victoria Economic Development Corporation with a focus on creating primary jobs. Of course, attracting businesses is about more than creating jobs. Since 2013, the Sales Tax Development Corporation has partnered with consulting firm The Retail Coach to bring in exciting new stores and restaurants, offering more options and encouraging residents to spend money locally rather than through outside retailers.

The Sales Tax Development Corporation also oversees the creation of certain recreational facilities, including the Youth Sports Complex, giving residents and visitors alike a place to compete and enjoy games. Other projects are less visible but no less important: Over the years, the corporation has allocated more than $9 million for drainage projects within Victoria and spent nearly $3 million securing water rights—a vital resource for a growing city.

Going forward, the corporation is looking to spearhead even more projects that will directly encourage economic development and improve quality of life in the city. One of these is the upcoming Placido Benavides Drive project. This $9.2 million endeavor is funded entirely by sales tax revenue, an investment that will yield dividends for our city’s future. The project will open up new land for development, both business and residential, which will not only add new sources of revenue but also help to create a more diverse tax base.

The Sales Tax Development Corporation has delivered on its promise to taxpayers by imagining a better Victoria and achieving that vision through a multilayered approach to economic development. That’s a pretty good deal for half a cent.

Gilbert Reyna is the director of finance for the city of Victoria. He may be reached at

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