Palm Valley residents to vote on sales tax increase in May

PALM VALLEY – It’s a few months away, but voters in Palm Valley will decide whether to increase the city’s sales tax from 1 percent to 2 percent.

If approved, the increase is expected to bring an additional $55,000 in sales tax revenue to the city annually.

That money will likely be used to add to the reserve fund in order to pay for future road reconstruction.

On Tuesday night, city officials agreed to hold the election in May along with the regular city election.

Council members considered a Nov. 8 special election on the matter to be held at the same time as the presidential election.

However, a special ballot would have to be created for the referendum question. That would cost the city about $3,500.

For some time Tuesday, it appeared the vote might occur in November.

City officials cited the possibility of receiving additional sales tax receipts as early as December if the vote was approved during the presidential election.

Currently in the city, sales tax is 7.25 percent, which includes 6.25 percent for the state portion.

If approved by voters, the sales tax in Palm Valley would rise to 8.25 percent.

Mayor George Rivera was quick to point out that increase would be seen at the Harlingen Country Club as well as items purchased online by local residents.

About half of the city’s current annual sales tax of $55,000 comes from the country club.

Palm Valley has little commercial and retail business and little available property for business. The city is made up of mainly the area within the wall around the golf course and then across the street from the entrance to the country club, including a few buildings and some land.

Some residents in attendance Tuesday suggested the city should have more retail availability, which would increase sales taxes.

“There really is no space for retail areas,” Rivera said.

He said he hoped to have the election in November in order to take advantage of gathering the additional revenue right away.

City council member John Widger said by waiting, the city could lose up to five months of the 1-percent increase.

Council member Julie Martin suggested the May 6 date, citing the desire to not spend $3,500 on a special election, even though Widger suggested it would take less than a month to recoup that money if approved in November.

The conversation and decision about the sales tax increase came minutes after officials agreed to continue moving toward an 8 percent tax rate increase.