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Texas Parks and Wildlife Funding
Park Funding in Texas — from Cigarettes to Sporting Goods
- In the early 1990s, the Texas Legislature’s Interim Report of the Committee on Environmental Affairs stated “ ... traditional sources of revenue that have allowed TPWD to provide for acquisition, development and maintenance of state and local parks for the past twenty years are failing to generate the funds required to handle the public’s needs. For example, the one-cent per pack cigarette tax generated $18.4 million in 1983, but plummeted in 1992 to a low of $13.5 million, and continues to decline. The state’s ability to maintain and develop parks for public usage is now in jeopardy. ... ”
- The interim committee further stated “In evaluating funding alternatives, it is necessary that the product or service being taxed generate revenues that will grow in proportion to Texas’ increasing population. ... Diverting all of the existing state sales tax on sporting goods, such as camping gear, to TPWD is one revenue alternative.”
- In 1993, the 73rd Texas Legislature passed H.B. 706 authored by Rep. Oliveira and sponsored by Sen. Montford. This pivotal bill switched the revenue source for state and local parks from the state cigarette tax to a draw from the general sales tax attributable to sporting goods. The cap was set at $32 million and distribution specified as follows:
- The first $27 million is distributed 50 percent to the State Parks Account 64 and 50 percent to the Recreation and Parks Account 467 (Local Park Fund)
- Amounts above $27 million are distributed 40 percent to the State Parks Account 64, 40 percent to the Recreation and Parks Account 467 and the balance to remain in the TPWD Capital Account 5004 to be used as directed by the TPW Commission, per legislative appropriation.
- If the full $32 million is appropriated, this formula means $15.5 million goes to the State Parks Account, $15.5 million goes to the Recreation and Parks Account, and $1 million to the Capital Account.
- IMPORTANT: there is no separate state tax on sporting goods. Park funding comes from a portion of Texas general sales tax revenue that is “attributed” to sporting goods. Revenue is based on an estimating formula used by the Texas comptroller, per the state tax code cited below.
- The state tax code (Chapter 151, Subchapter M., Sec. 151.801) defines “sporting goods” as “tangible personal property designed and sold for use in a sport or sporting activity, excluding apparel and footwear except that which is suitable only for use in a sport or sporting activity, and excluding board games, electronic games and similar devices, aircraft and powered vehicles, and replacement parts and accessories for any excluded item.”
- The comptroller has reported a historic upward trend of sales tax revenue attributed to sporting goods, showing a steady increase from about $58 million in 1993 to about $94 million in 2004. The comptroller estimated revenue from the tax attributed to sporting goods at about $112.5 million for 2008, $116.7 million for 2009, and $110.8 million for 2010, $118.3 million for 2011, and $122.9 million for 2012. Projected revenue estimates are $128.4 million for 2013, $130.6 million for 2014, and $135.2 million for 2015.
- The legislature passed HB 12 in 2007, which changed the funding formula to deposit an amount equal to 94 percent of the sales tax attributed to sporting goods into various TPWD accounts, including 74 percent to Account 64 for state parks, 15 percent to Account 467 for local parks, 1 percent to Account 54 for TPWD capital construction, and 10 percent into a new account created by the bill, Account 5150, for large city and county park grants. At the same time, the bill limited sporting goods tax revenue transfers by the Comptroller to amounts actually appropriated by the legislature. The 94 percent amount allocated to TPWD is therefore not dedicated funding; only the portion of that amount appropriated by the legislature each session is considered dedicated.
- In 2015 the legislature passed House Bill 158, which dedicated 94 percent of the state sales tax attributed to sporting goods to Texas Parks and Wildlife Department (the remaining 6 percent goes to the Texas Historical Commission for state historic sites), with the provision that each session the legislature may still appropriate all or only part of this amount for TPWD to spend. A related bill, Senate Bill 1366, replaced the formula set up by HB 12 in 2008, which mandated a fixed percentage allocation of the sporting goods tax to various accounts. This important change made by SB 1366 essentially gave flexibility to spend dollars where they are most needed for parks.
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