AG rules for county in tax fight with city

Apr. 6—Drawn into a rancorous city-county dispute over rural sales tax revenues, Texas Attorney General Ken Paxton has ruled that the City of Odessa cannot claim any of the money that Ector County is collecting to clean up illegal dumping, improve roads and enhance law enforcement.

District Attorney Dusty Gallivan, who was county attorney when the city filed a request for Paxton's opinion last year, said Tuesday that the city's attempted tax-grab was disdainful of the residents of rural areas like West Odessa, Pleasant Farms, Gardendale and Goldsmith. "It's always good when the attorney general says, 'Yeah, you were right," Gallivan said.

Referring to City Attorney Natasha Brooks' claim that the county had improperly filed a notice about its intention to start collecting the 1.25-cent tax in early 2019, he said, "The attorney general ruled that the city was not entitled to the notice and that if they annex additional properties that are part of the tax assistance district, then they do not get to collect sales taxes because those areas are already at the maximum sales tax for Texas."

City council members had claimed at a 2 1/2-hour city-county confab on Dec. 10, 2019, in commissioners court that they did "not want to take any of the county's money," but Gallivan said Tuesday that "they absolutely did.

"What they were trying to do was circumvent the will of the voters of Ector County and reallocate those funds for the city's needs," he said. "The city puts in the infrastructure when they annex something and they want to recoup their investment, but they can't do that at the expense of the county residents.

"Environmental enforcement, the roads and law enforcement have all seen some growth in the past year, thanks to the sales tax. The environmental officers are cleaning up the county as best they can, the roads are better than they would have been and there is more law enforcement coverage."

Expecting reduced revenues due to the pandemic in the fiscal year that began last Oct. 1, the commissioners court budgeted for $12 million in sales tax revenues this year after collecting $14.7 million during 2019-20.

Efforts were unsuccessful on Tuesday to reach Brooks about what direction she will now recommend for the city to take. She told county officials during the late 2019 pow wow that as a conciliatory gesture, the city would reduce its extraterritorial jurisdiction from five miles to the 3 1/2-mile ETJ it claimed before declaring itself to be over 100,000 in population in 2018.

County Judge Debi Hays noted Tuesday that an effort to gain the voters' approval of a sales tax failed at the ballot box in November 2017 before a voters' education campaign secured approval a year later. "We knew we needed to educate the voters as to what the sales tax would be used for and we held town halls across the county after I took office in June 2018," Hays said.

"They told us that the main things they wanted were No. 1, an environmental cleanup, No. 2, to improve the roads and No. 3, to help law enforcement. In the process of that, a political action committee called Citizens for Ector County was formed with (rancher) Joe Hurt as treasurer. Joe made the initial deposit into the PAC that purchased all the campaign signs."

Asked if she believed the city officials' assertion that they didn't want the money collected by the county, which is nowhere near as well-funded as the city, Hays said, "Wouldn't that have been the outcome?

"If it wasn't about the money, then why did they go all the way to a law firm in Lubbock to file for it? If the ruling had been against the county, it would have been like saying the votes didn't matter of the people who live in the county but not inside the city limits. When they voted for the sales tax, they knew they'd hold us accountable and we would only be able to use the money for what they wanted it used for."

Sheriff Mike Griffis said Tuesday that he was hopeful Paxton's ruling would start a new era of good will between the county and city. "I think we're moving in the right direction," Griffis said.

"Maybe it will encourage more cooperation and we can move forward as a community."

Reporting that the sheriff's office and Odessa Police Department have probably the best relationship they have ever had, the sheriff said, "I hope the city council and the commissioners court can now move forward and collaborate on things.

"The city has annexed within a few hundred feet of areas like Yukon Road, the East Loop and South 385 all the way to the Loop in an attempt to get businesses to go in there so they can get that sales tax money. They need to expand their money intake, but the county does, too.

"They need to grow together instead of trying to outdo each other. I just want it to be a community and not have a city-county battle."

Upon taking office in January 2017, Griffis said, he reached out to Chief of Police Mike Gerke and officers with the public school district, UTPB and other departments about maximizing cooperation. "I expressed to them that we were there for them for anything they needed and would help in any way we could," he said.