The Galveston City Council has agreed to divide revenues from an extended 0.5% sales tax equally among infrastructure, beach reconstruction, park facilities, and economic development initiatives if voters approve an extension of the city’s economic development sales tax in November.
The tax is expected to generate $4 million a year, which would support bonds for the various efforts.
City officials are looking to the tax as a way to generate local matching funds so the Texas General Land Office can expand its project to widen three miles of beaches west of the Galveston Seawall by 200 feet. The work was first thought to cost $13.5 million, but the latest estimate is $35 million to $70 million.
The tax, which was first approved by voters in 1993, supported bonds that financed streets, sewer and drainage, and beach reconstruction projects. The final bonds supported by the tax will mature before the end of 2008.
Galveston’s general obligation bonds have underlying ratings of A2 from Moody’s Investors Service and A-minus from Standard & Poor’s.