Rusk considers new ½-cent sales tax designation
REDCO would like to have option to use funds on streets, water
BY GLORIA JENNINGS STAFF WRITER

Directors of the Rusk Economic Development Corporation (REDCO) met Monday to explore options to change the way the half-cent sales tax is spent in Rusk.

Currently, the funds are designated for a 4A corporation, which is more restrictive than a 4B designation.

Under the umbrella of 4B, a city may use halfcent sales tax funds to pay for streets, highways, museums, building manufacturing facilities, even amateur sporting facilities or tourist facilities. The list of potential expenditures is broader in the 4B designation. Cities like Tyler use some of their 4B funds to build new streets. Jacksonville is also a 4B city.

The board will meet again in two weeks after the organization's attorney, Ron Stutes of Porter-Minton law firm in Tyler, has researched options to alter the city's economic development corporation tax.

They discussed adding a street maintenance tax or adding a 4B economic development corporation tax or holding an election for the 4A corporation to use 4A revenue for 4B projects. An election of this type is not uncommon. Several years ago, the city of Rusk defeated an election to spend 4A money on a 4B expenditure.

Members of the corporation discussed ways they could use the tax revenue to help the city with the cost of drilling a water well.

If the designation is changed to 4B, Mr. Stutes said the city could call a special election to allow the city to include water improvements as an expense category

The Handbook on Economic Development Laws for Texas Cities states that a 4B election with the added language of using 4B money for water facilities could all be done in the same election.

Other options under consideration would allow the city to create a street maintenance tax out of the half-cent tax if it was split between 4A and 4B.

There are 97 cities that have both the 4A and 4B corporations. There are some differences in the laws that govern these corporations. For example, five board members are required for 4A corporations while seven are needed for a 4B corporation.

REDCO currently has $51,000 available in unspent tax revenue. The question was raised if the voters approved the change from 4A to 4B designation, whether the funds would be available to the city. No firm answer was obtained on that issue and Mr. Stutes will continue researching the matter.

Charles Hassell, president of the Rusk Economic Development Corporation presided.

Local citizens are invited to contact members of the board and discuss ideas. "We want public input," Mr. Hassell said.

Attending were members Todd Foxworth, Bob Goldsberry and Bobby Tosh. Absent were Louie Byers and Maxine Session.