Hospital to surrender sales tax
The Rockdale Hospital District has unanimously voted to surrender the halfcent sales tax it has collected for the past 16 years in favor of economic development for Rockdale.
RHD directors formally voted to lower the sales tax rate to zero in a called meeting at Richards Memorial Hospital on Monday, attended by city officials including Mayor John Shoemake and City Manager Kelvin Knauf.
Two elections will be necessary. Hospital district residents (within the 1994 city limits of Rockdale) will have to agree to lower the rate from one-half cent to zero.
And Rockdale residents (current city limits) must agree to impose a one-half cent sales tax to be collected by the city’s Municipal Development District (MDD).
The city has offered to hold both elections on May 8, along with its regular council election.
City officials were prepared to present a 130-signature petition which would have forced the election but that turned out not to be necessary.
RHD directors emerged from a 30- minute executive session which began Monday’s meeting in the hospital cafeteria to hear board president Dr. John M. Weed III endorse the proposal.
“We’re confident we can operate without a sales tax,” Dr. Weed said.
Directors then declined to accept the petition, noting its purpose had already been accomplished. “We support the purpose of the petition 100 percent,” Dr. Weed said.
Dr. Weed said since future economic conditions cannot be forecast the district leaves open the possibility of bringing back the district’s ad valorem property tax if conditions warrant.
“That’s a tax the board can raise or lower without an election,” he said. “I’d term it highly unlikely we’d ever need it.”
“But we just can’t leave ourselves hanging (without an emergency source of revenue),” he said.
Here’s where it gets complicated.
The hospital district is composed only of that portion of Rockdale which was in the city limits as of 1994, the year the district was created.
That’s most of Rockdale. Those are the voters who will decide whether the RHD will give up its sales tax.
It’s a slightly different voter pool who will decide if the city can collect the half-cent tax targeted for surrender by the RHD.
The city limits have expanded since 1994 and the election to impose the sales tax being given up by the hospital district will cover all of Rockdale, including areas annexed since 1994.
MDD expansion Knauf said there are also plans to expand the Municipal Development District to the current city limits.
Presently the MDD covers only the new areas annexed since 1994 and Rockdale’s extra-territorial jurisdiction.
The total amount of sales tax being paid by Rockdale residents wouldn’t change unless hospital district voters approve surrendering the RHD’s sales tax and Rockdale voters turn down the city’s proposal to collect that tax.
In that case the total sales tax would drop by one-half cent inside the “1994 city limits of Rockdale.”