Regarding Glen Rose Spending of EDC (Economic Development Council) Tax Money Somervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas


Regarding Glen Rose Spending of EDC (Economic Development Council) Tax Money

2 May 2019 at 7:57:50 PM

Was sent this anonymously recently: This appears to be quoting from a recent Glen Rose Reporter article  initially (not sure of the date) and then some comments. Appears that the issue here is the spending of $8000 for a tanning bed for a salon. 

"Last year, Glen Rose raised about $300,000 through its EDC sales tax. State law mandates that 4B EDC sales tax revenues be spent on community and economic development projects. During 2018, the Glen Rose EDC authorized funding for the following projects: $52,000 for a restroom remodel and drainage project at Oakdale Park, $9,718 for tables and chairs at Barnard’s Mill, $8,000 for a tanning bed and supplies for Rockin Hair Body and Soul Salon"

So we are using public money collected from sales taxes to fund a private business?  How is that not a socialist policy?  If they say they are Republicans, and are for small government and low taxes why not just lower the local sales tax rate?  That would be a sensible policy, and would lead to benefits for all.    I would think that economic development would be for things that bring people in to Somervell County, and I would think that because it is state law.


Turns out, the state agrees:  from: Type A and B Economic Development Corporations Overview

Type B EDCs — Developing Industries & Cultivating Communities

Type B EDCs can fund all projects eligible for Type A, as well as parks, museums, sports facilities and affordable housing. However, Type B EDCs are subject to more administrative restrictions than Type A. More details »

Allowable Costs

There are some limitations on how sales tax revenues can be used to fund a project. Eligible expenditures include:

  • acquisition of land;
  • machinery and equipment;
  • construction costs;
  • planning and professional services related to the project;
  • financial transactions and reserve funds; and
  • administrative and other necessary expenditures.

Primary Jobs Requirement

The main requirement is that the businesses bring new money into the community. In 2003, the Legislature voted to require that certain projects create or retain primary jobs. A primary job is one at a company that exports a majority of its products or services to markets outside the local region, infusing new dollars into the local economy. Primary jobs are further limited to specific industry sectors such as agriculture, mining, manufacturing and scientific research and development. Those industry limitations can be found in Local Government Code, Chapter 501.

Performance Agreements

EDCs cannot simply give sales tax proceeds to businesses. An EDC must enter into a written performance agreement with any business enterprise that it funds directly or makes expenditures that benefit an eligible project. At a minimum, the performance agreement must contain:

  • a schedule of additional payroll or jobs to be created or retained;
  • the capital investment to be made by the business enterprise; and
  • the terms for repayment of the EDC's investment if the business fails to meet the performance requirements specified in the agreement.

Type A and B Economic Development Corporations Overview

Texas Comptroller of Public Accounts

The Development Corporation Act of 1979 gives cities the ability to finance new and expanded business enterprise...


Again, the above was sent in. I wonder about this too, why is giving money to a hair salon appropriate?  Although I generally do not favor the use of socialist as an adjective, because we have many things in communities that are socialist in nature, definitely giving money to a private company in apparent contravention of legal rules is inappropriate at best. 


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