PORT NECHES — Port Neches may follow in Nederland’s footsteps in reallocating existing sales tax to go toward streets but first it must go before voters.

Port Neches councilmembers at 4 p.m. Thursday will discuss calling a special election that, if passed, would take a portion of funds earmarked for the Port Neches Economic Development Corp. and divert them to the street general fund.

“With the pending sale of a portion of the city’s riverfront property and the use of a portion of those proceeds to retire the existing Port Neches Economic Development Corp. debt, that may create an opportunity to allow consideration of a decrease in the EDC’s sales tax rate while implementing a street maintenance sales tax,” Port Neches City Manager Andre Wimer said.

This is not a new tax nor is it a property tax. It would be a matter of moving sales tax money to the streets.

Background info

Back in 2000, a half-cent sales tax was approved that resulted in the formation of the PNEDC, meaning one-half of 1% of sales tax went to the PNEDC. Through this tax, the PNEDC collects about $450,000 per year, which is used for a variety of economic development incentives and projects.

The debt service the PNEDC is paying now is $167,000 per year that assisted in the sale of a portion of the riverfront property. The sale of 31.9 acres to Dinh Nguyen of LLB Construction LLC is pending and once finalized Nguyen plans to construct about 97 high-end homes on the land at the corner of Block Street and Lee Avenue.

Currently, about $140,000 per year is allocated to the streets general fund.

Nederland

Nederland voters made the change back in 2007, approving the reallocation of funds from their economic development corporation to streets and, by state law, the issue must be reauthorized every year fours — and has been. Wimer was city manager in Nederland when the issue came before voters.

Nederland City Manager Chris Duque said the city’s sales tax is divided between the allocation into the general fund, the street improvement fund and the Nederland Economic Development Fund.
Last year the street improvement fund raised over $800,000 in Nederland.

“This street improvement fund makes a huge difference for our street work,” Duque said. “We utilize these funds for hot mix overlay projects and concrete street work.”

He explained that the BOMAG/chip seal work is done with the county’s assistance and not with the allocated fund nor was the major Nederland Avenue project done with those funds.

“This upcoming year, we plan to utilize over $2 million from the street improvement fund for street work,” he said. “Before the street sales tax was implemented the city was only able to allocate $100,000 to $150,000 for streets, which only allows you to keep up with pot holes and minimal chip seal street work. The revenue loss after Walmart left significantly affected the street budget.”

The Nederland Walmart was located on FM 365 and closed in the early 2000s.