A request for the city of El Campo to abate sales tax had council members hitting the pause button Monday night.
Gene’s Wrecker Tire and Truck Repair is planning a $2 million expansion on U.S. 59 and is requesting a seven-year, sales tax abatement. The company is requesting its sales rather than property taxes be abated because the U.S. 59 location it will construct lies in a Tax Reinvestment Zone. The zone draws property tax dollars on new development for, in this case, frontage roads on U.S. 59. Property taxes inside the zone cannot be abated.
Staff estimates granting the abatement could mean reimbursing up to $7,100 in sales tax annually.
Some members of council said it could cost far, far more than that.
“If we grant one, it could open a can of worms,” Councilman David Hodges said, expressing concern that other businesses could make the same request.
Councilwoman Gloria Harris agreed.
“Once you do one, the old saying goes you have to do something for everybody else,” she said. “We spent almost $8 million (on the frontage roads). Sales tax is our way of saving some of that back. If we allow every business (to abate it), we’re losing.”
The new facility, Gene’s owner Mark Cochrum said, will bring more high-paying jobs to the area as well as dollars that will potentially be spent in other businesses.
His company is now roughly 20 percent mechanical work, Cochrum told council. With the new facility, he projects that to change to 50 percent.
Councilman Chris Barbee requested the item be tabled to allow a newly-formed Economic Development Committee to review materials and make a recommendation. Council agreed in a 6-1 vote with Harris against, saying, “I’ve already made up my mind.” The issue will return to council March 9.
Mayor Randy Collins appointed council members John Hancock, Harris and Hodges to the new committee. They will work with City Manager Courtney Sladek and City Development Corporation Executive Director Carolyn Gibson.