Posted on

Leander residents eager to invest in Leander rather than in Austin/Cap Metro

In May 2019, LeanderLookout published an analysis of Cap Metro’s April 18 presentation to the Leander City Council. Due to the immediate and overwhelming interest, a survey link was added to that analysis with the expectation that perhaps a small  percentage of readers, two or three dozen at most, would participate.

Over 200 Leander residents with unique IP addresses subsequently completed the survey. That count exceeds 10% of the number of voters in the May 2019 city council elections.

Over 25% of those who expressed support in Leander withdrawing from Cap Metro supplied their name and phone/email address to be contacted should their assistance be needed in circulating any voter-driven petition required to put withdrawing from Cap Metro on the November 2019 ballot. To honor privacy commitments, survey participant contact information has been intentionally omitted from these survey results.

The below facts and partial historical timeline will be helpful for Leander residents in forming a position on this issue, particularly as the City Council considers taking the first step in a potential  withdrawal from Cap Metro.

    • 1985 – A small number of Leander’s ~3,000 residents voted for Leander to partner with Cap Metro, which was pitched to Leander residents as an economical means of transportation that would alleviate traffic congestion.
    • 1996 -The Cap Metro board raised the sales tax rate to a full 1%, against the wishes of those responsible for appointing board members and against outcry by citizens and local elected officials.
    • 1996 – Cap Metro’s General Manager Justine Augustine presented to the Leander City Council.  Ridership averaged less that 55 boardings per weekday on 26 MetroExpress (coach buses) departures, an average of just over 2 riders per departure.  Mr. Augustine was at a loss when questioned whether Cap Metro had conducted any surveys as to why residents were not riding. Without any substantiating data, he assured the City Council that ridership would increase once MetroRail was put in place, and that residents would take it to shop at Highland Mall and to party on 6th Street on weekends.
    • 1997 – the Texas Legislature acted and removed the entire Cap Metro Board and management due to corruption or mismanagement following an FBI investigation. The Legislature restructures the  Cap Metro board and requires Cap Metro to hold a referendum for voters to decide on whether to proceed with light rail.
    • Initial participants Cedar Park, Pflugerville, Rollingwood, and West Lake Hills withdrew from Cap Metro. Round Rock and Georgetown never entered into the partnership.
    • 2000 – Voters defeat a Cap Metro referendum on light rail
    • 2004 –  Cap Metro puts forward a scaled back referendum on light rail. The measure passes.
    • 2009 – Texas Legislature restructures the composition of the Capital Metro board yet again.
    • 2010 – MetroRail service begins

Sales Tax Primer

    • “Texas imposes a 6.25 percent state sales and use tax on all retail sales, leases and rentals of most goods, as well as taxable services. Local taxing jurisdictions (cities, counties, special purpose districts and transit authorities) can also impose up to 2 percent sales and use tax for a maximum combined rate of 8.25 percent.” https://comptroller.texas.gov/taxes/sales/
    • Sales taxes are consumption taxes imposed by the government (taxing jurisdiction) on the sale of goods and services. A conventional sales tax is levied at the point-of-sale, collected by the retailer (commercial enterprise) and passed on to the taxing jurisdiction. But there must first be commercial enterprise to transact retail sales and generate sales taxes.
    • Sales taxes are an important source of revenues for local governments. Sales taxes are used to install and maintain infrastructure, provide public safety, fund city operations, and provide economic development. Without sales taxes, the burden of fulfilling the city’s financial obligations falls increasingly on homeowners, property owners and renters (through rental rates).

Sales Tax Stewardship

How does Leander compare to neighboring Cedar Park, Georgetown and Round Rock in the use of the 2% sales tax?

    • Leander imposes a 2 percent sales tax, but forfeits half of that to Cap Metro. Cap Metro is projected to capture $5.4M in sales taxes from Leander in the current fiscal year, or, $430k per month.
    • Since 2010, Cap Metro has captured over $27M in sales tax revenue from Leander.
CEDAR PARK
 General Fund
1.0%		 Infrastructure
.50%		 Economic Development
.50%
ROUND ROCK
General Fund
1.5%		 Infrastructure & Economic Development
.50%
GEORGETOWN
General Fund 1.0% Property Tax Relief
.125%		 GEDCO .125% GTEC .50% Street Maint. .25%
LEANDER
General Fund
1.0%		 Capital Metro
1.0%

City Sales Tax Revenue Utilization (of the other 1% FY 2011- 2018)

CEDAR PARK
4A (.50%) 4B (.50%)
$41,611,811 $41,611,811
$83,223,622
Cedar Park has used the additional 1% sales tax to incentivize economic engines such as 1890 Ranch and The Parke. The resulting sales tax revenue enabled Cedar Park to develop Cedar Park Center and the Cedar Park Recreation Center, among other civic improvements and amenities.
ROUND ROCK
Type B (.50%) Other
$144,311,930 $172,812,703
$317,124,633
Round Rock has used the additional 1% sales tax to incentivize economic engines such as Round Rock Premium Outlets and Round Rock Crossing
GEORGETOWN
Property Tax Relief (.125%) 4A (.125%)
GEDCO		 4B (.50%)
GTEC		 Street Mntc.
(.250%)
$10,271,446 $10,271,446 $47,990.394 $20,609,594
$82,240,203
Georgetown has used the additional 1% sales tax to incentivize economic engines such as Wolf Ranch Town Center, Riverview Mall, and Williamsburg Village Center
LEANDER
Cap Metro (1.0%)
 $27,070,243
Leander has used the additional 1% sales tax to subsidize mostly riderless trains and buses for over 30 years.

 

 

City Per Capita Sales Tax Revenue
Round Rock $568
Cedar Park $393
Georgetown $325
Leander $87
Per capita sales tax revenue comparisons show Leander is dead last in economic development and financial rigor

Resulting Impact on Leander Homeowners, Property Owners, and Renters from Forfeiting Sales Tax to Cap Metro

City Property Tax Rate
Round Rock $.42000 per $100 valuation
Cedar Park $.44900 per $100 valuation
Georgetown $.42400 per $100 valuation
Leander $.551867 per $100 valuation
Leander homeowners pay the highest city property tax rates of any adjacent city.

Desperate to stimulate economic development and without 4A or 4B funds to do so, the previous city council and mayor resorted to issuing bonds (without citizen vote) for the high risk Northline Project, putting Leander homeowners and property owners on the hook for $15M.

The first payment of $471,975 ( interest only) is due September 30, 2019. The developer has not yet broken on the project. To add insult to injury, Cap Metro is projected to collect ~$450,000 in sales taxes from Leander for the month of September. Those are funds that could have been used for economic development in Leander. Leander taxpayers lose twice.

Cap Metro Ridership After 34 Years

      • On average, 473 boardings per weekday on either a train or bus from Leander
      • 10 MetroRail departures + 33 MetroExpress departures per weekday
      • Average number of riders per departure: 11
      • Average cost per Leander boarding being subsidized by Leander residents through sales taxes: $43.05 per boarding or $10,977.53 per year per rider.
      • Since 2014, average ridership per weekday departure has increased less than 3 riders per departure.
      • Observations by MetroRail riders of rail cars being full and standing room only are typically limited to outbound to Lakeline Station or inbound after Lakeline Station. The boardings that do originate in Leander are concentrated during the early morning on weekdays.
      • It is unknown the percentage of Cap Metro riders who are actually residents of Leander and pay property taxes to the City of Leander. Even if 100% of those who ride Cap Metro are Leander residents, continuing the subsidy is untenable.

Cap Metro’s Plans for Leander

      • Cap Metro has no substantial plans for Leander other than to continue siphoning Leander’s sales tax and using Leander taxpayers as an ATM to help fund projects elsewhere in the Cap Metro system.
      • Cap Metro has no plans to extend a double track beyond Lakeline Station out to Leander Station, Cap Metro does not believe there is, or will be in the near future, enough ridership to and from Leander to justify a double track that would allow increased frequency of service.
      • Cap Metro has no major capital projects planned for Leander for the near future
      • Cap Metro has no concrete plans to develop the 12 acres they own in the Transit Oriented Development (TOD) for anything other than existing surface parking
      • Cap Metro leadership believes they have a vision and that “hopefully” with some funding through a referendum this coming November they would be able to move to a system where the Red Line becomes a central element of a comprehensive transit network serving in the entire region. Note: This is code for getting voters to approve more debt, further shackling residents and taxpayers in Cap Metro partner cities like Leander to service that debt through sales taxes.

Any carrots Cap Metro tries to use to appease Leander residents at this stage is too little, too late. Proposed neighborhood circulators and Saturday service will only result in more empty buses and trains as well as traffic  flow disruptions.

Transportation and Traffic Considerations

      • 183A came online since Leander partnered with Cap Metro, with quick access from Leander to Lakeline
      • Lakeline Station is in Austin and only 11 miles and a 16 minute drive from Leander Station via Hwy 183A, and only 7.5 miles and  10 minutes from the intersection of Crystal Falls and 183A.
      • Lakeline Station would still be operational should the residents of Leander vote to withdraw from Cap Metro.
      • Every MetroRail and every MetroExpress arrival and departure stops at Lakeline Station.  There are 188 weekday/night departures per week and 15 Saturday (MetroExpress) departures. Cap Metro collects $5.4M in sales tax annually from Leander taxpayers, or an average of $103,846 per week. Average cost per departure: $511.00   Leander taxpayers are basically paying for a very expensive shuttle service from Leander to Lakeline Station.
      • Average daily MetroRail boardings have decreased since January 2015, while MetroExpress boardings have modestly increased due to the addition of express lanes on Mopac.
      • MetroRail impacts 4 signaled rail intersections in Leander for each departure and arrival. There are 10 departures and 10 arrivals per weekday, resulting in 80 potential traffic disruptions per weekday.
      • MetroExpress impacts a signaled rail intersection in Leander for each departure (San Gabriel) and arrival (Hero Way & 183). At each signaled rail intersection, MetroExpress must complete a safety stop, delaying subsequent east-west bound vehicles. There are a total of 33 departures and 33 arrivals per weekday, resulting in 66 potential traffic disruptions per weekday.

Leander’s Future

      • Leander’s financial and economic future hinges on ending the partnership with Cap Metro
      • The future for Leander is not how to shuttle residents 25 miles back and forth to downtown Austin, or subsidize entertainment transportation to Austin, or send residents to spend their retail dollar in Austin. Why should Leander taxpayers be subsidizing entertainment travel, whether for residents or non-residents, to spend their retail and entertainment dollar in Austin?
      • It is fantasy to believe those who reside in Austin will be utilizing Cap Metro to travel to Leander for entertainment or work.
      • Leander’s future is dependent on attracting high salary employers and businesses to Leander, so residents can work, shop and relax in Leander. That attraction begins with retaining sales tax revenue and investing in Leander, not Cap Metro’s Austin infrastructure.
      • Even if it takes five years to satisfy Leander’s Net Financial Obligation to Cap Metro, the long term financial health of Leander will be worth the short term treatment.
      • If Leander voters do not withdraw now, Leander will be facing the same problems and having the same discussions in 10 and 20 years as it has been wrestling with the past 20: How to grow Leander’s sales tax base and achieve property tax relief for homeowners.
      • It is time for Leander residents to have another opportunity to decide. This is a major reason the current council and mayor were elected.

 

Copyright © 2019 Don Stroud