Funny money: Making sense of cents

By Richard Greene | Published Saturday, March 28, 2015

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When news broke this week about the future hotel at the civic center and Decatur’s $4.4 million loan to get the project going, comments started to filter in on the Messenger Facebook page.

Richard Greene

Richard Greene

Some people questioned the need for the hotel in this market, while others suggested spending on parks, sidewalks and a recreation center instead.

While the former may be up for debate, the latter is often not as simple as it sounds – as not all public money is equal.

With cities, schools and other governmental entities, some funds and revenues have significant restrictions.

Many cities, including Decatur, have gone to their voters to set up economic development corporations. With these EDCs in place, either Type A or B, they collect a portion of the sales tax.

Decatur’s EDC collects 0.5 cent on every dollar. But as a Type A EDC, its money is restricted to manufacturing and industrial development that create jobs.

Other funds collected by cities also are restricted, including hotel occupancy taxes that are to be used to promote tourism and the convention and hotel industry.

Monies for schools can be even more confusing. Every time a bond package comes up looking to build a new school, classroom addition or athletic facility, comments usually are made about teacher pay. The two are totally separate.

In Texas, schools can issue bonds for purchasing land, construction and equipment. Districts levy up to 50 cents per $100 in property taxes to pay off the debt for the bonds.

Teacher salaries come out of the maintenance and operations side of the budget that comes from the state’s limited contributions based on average daily attendance and property taxes capped at $1.04.

For each, the restrictions multiply when grants from the state or federal governments get involved.

At first, it’s not always easy to understand the decisions of the leaders on projects. But sometimes, understanding what money is used and how it can be spent can give a little insight. It can also bring up better questioning.

Richard Greene is the sports editor for the Messenger

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