Texas cities can add sales tax to utility bills

FORT WORTH, TX The increases are small, topping out at 50 cents for every $100 of a bill. But Texas Gov. Rick Perry expressed concern about the measure when it became law without his signature in June.

The Fort Worth Star-Telegram reported Sunday that a handful of Texas cities -- many in northern Texas -- have created taxing districts to support police and fire services in the past 15 years. But state sales taxes couldn't be included until the recent change in the law.

The state comptroller says all but nine of the 32 districts eligible to assess the tax are in Tarrant County.

The new law doesn't require voter approval for the sales tax to be assessed. Republican state Sen. Jane Nelson of the Dallas-Fort Worth suburb of Flower Mound, who sponsored the measure in the Legislature, said voters approved the tax when they created districts for crime or fire control.

Critics say sales taxes are regressive and particularly bad when they increase the costs of utilities.

"This is increasing the tax on a necessity of life," said Dick Lavine, a senior fiscal analyst with the Austin-based Center for Public Policy Priorities, a think tank focused on issues affecting low-income Texans.

The Texas Municipal League, which lobbies lawmakers on behalf of cities, supported the measure, but Executive Director Frank Sturzl said it wasn't a high priority.

The Fort Worth suburb of North Richland Hills created a crime control district that has allowed the city to hire more police officers and pay for crime-prevention programs without raising the property tax rate, city spokeswoman Mary Peters said. The city will assess a half-cent sales tax on energy bills starting July 1.

"This will let us apply the same sales tax rate across the board, which will make our budgeting and accounting processes for sales tax collections easier," Peters wrote in an e-mail.

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