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The Horseshoe Bay City Council approved putting a quarter percent sales-tax rate increase on the November ballot. If approved by voters, proceeds from the increase would go into the city’s general fund.

Currently, the city levies a 1.75 percent sales tax with a quarter percent of that dedicated to street maintenance. The additional 0.25 percent, if passed, would raise the rate to 2 percent and bring in roughly another $200,000 a year for the general fund. 

In 2015, the Texas Legislature approved a measure allowing cities to levy a maximum 2 percent sales tax.

City staff told councilors during a special meeting Tuesday, April 6, that many Highland Lakes municipalities, including Burnet, Granite Shoals, and Marble Falls, are already at 2 percent.

City Manager Stan Farmer said that putting all revenue generated from the additional quarter percent into the general fund would give city leaders more choices on where to apply the funds. 

“(The council) decided to have a little more flexibility in the general fund,” he said. “(If voters approve), it doesn’t mean street maintenance loses money or won’t get as much. They just won’t have their own line item on street maintenance. Street maintenance is part of the public works department, which is part of the general fund.”

If voters say yes in November, Farmer noted the city wouldn’t begin collecting revenue from the increase until April 2022.

In July, the council will approve the wording on the increase for the November ballot.