September 20, 2023 337 PM
MARFA — At last week’s meeting, the Presidio County Commissioners Court discussed the possibility of charging a county-wide sales tax to help fill a chronic budget shortfall. The county currently brings in the majority of its revenue from property tax — but during public comment, a concerned former county resident raised the possibility of also charging a county-wide sales tax.
Former longtime Presidio County business owner Daniel Browning brought the issue to the attention of commissioners last Wednesday after following the latest in a series of tense budget seasons. “In one way or another, the county’s budget shortfall is always in the news, and no real progress has been made toward a solution,” he said.
Browning explained that the state of Texas allows cities and counties to charge up to 8.25% sales tax on local purchases. That leaves 2% to be divvied up between local taxing entities — the city of Marfa currently charges a 1.75% sales tax, leaving .25% potentially up for grabs.
(Browning submitted a text version of his comments to the Sentinel as a letter to the editor, which can be read in its entirety in this issue’s opinion section.)
County Attorney Rod Ponton said that Presidio County was one of a few counties that did not have their own sales tax, and that the small margin left to raise tax rates in Marfa presented a very unique opportunity. “Almost everyone uses [the maximum tax rate] up — it’s ‘use it or lose it,’” he said.
If the county did not take steps to negotiate for that .25%, Ponton explained, the county might be “forever barred” from the prospect of taking in any revenue from sales tax.
The city of Presidio, on the other hand, presents a much different challenge. The city is home to an additional taxing entity — the Presidio Municipal Development District (PMDD) — which skims .5% from sales tax for its budget.
As a result, Presidio residents pay the maximum 8.25% in sales tax: the city collects 1.5% and PMDD collects .5%.
PMDD is a “special purpose district” created by the Texas State Legislature in 2013 with the goal of growing local business in Presidio. The board’s leadership is appointed by Presidio City Council. While the organization has suffered from heavy turnover, recent successful PMDD projects have included the opening of a farming operation, rehabilitation of public parks and funding for the local daycare center — all which strive to support the city’s workforce.
Presidio Mayor John Ferguson said that the odds the city would give up any of its sales tax to the county were slim to none. He said that while the city has been making strides toward cleaning up its budget and working toward a consistent surplus, there’s still a long way to go. “From the city perspective, we’re razor thin,” he said.
In his comments, Browning had pointed out that the cities of Marfa and Presidio have a revenue stream that the county doesn’t: utilities. Both cities collect water, sewer and waste disposal services, and Presidio also makes money from its landfill.
Ferguson explained that the situation wasn’t that simple. While these utilities do ensure a steady stream of income, their upkeep eats up a lot of that revenue — he pointed toward the city’s water service, which has been plagued in the past few years by chronic leaks and meter issues and is in need of a massive overhaul.
While the city has managed to secure federal grant money to address some of these issues, grants aren’t a blank check — they require up-front matching funds from the city and can only address specific issues. “We’ve got a skeleton crew here,” Ferguson said. “That story’s not going to change. We’re going to need to hang on to any sources of revenue that we have.”
County Judge Joe Portillo said that he was excited by Browning’s enthusiasm about the topic — and had done a lot of thinking himself about how to increase the county’s tax revenue, especially compared to neighboring Brewster County, which takes in around a million dollars a year from county sales tax.
He also knew that the differences between Presidio County and other other counties throughout Far West Texas are structural — there aren’t a lot of businesses operating outside of Marfa and Presidio city limits, and there aren’t big box stores and car dealerships where taxing entities can take in money from “big ticket” purchases.
Portillo stressed — while he would continue to explore the idea — it wasn’t a new revenue stream. “All you’re really doing is taking money out of somebody that doesn’t have any money and putting it in somebody else’s pocket who doesn’t have it,” he said.
Browning was sympathetic to that line of reasoning — to a point. “A failure to take action on investigating this potential income source is a direct willingness to put the individual cities before the needs of the county and its residents as a whole,” he told commissioners. “This [attitude] will continue year after year to cause budget shortfalls.”