Galveston seeks cash as public safety costs soar
By B. Scott McLendon
Galveston County Daily News
February 24, 2023
GALVESTON -- As Galveston’s public safety costs rise to 70 percent of the city’s general fund revenue, leaders worry about services such as parks, and council members are enacting ordinances to capture new money, officials said.
“Around 63 percent of our budget is first responders, fire, EMS, police, and that will probably be going up from year to year,” Mayor Craig Brown said. “Tourism is one of our major economic engines for the city, and when we look for alternative revenue sources, we want to have that funding originate from our visitors to be used for the betterment of our residents.
“This funding will not only allow us to provide enhancements for our residents but also allow us to decrease the amount residents have to contribute. Generating more funding from alternative sources allows us to consider reducing our property taxes even more.”
About $39 million of the city’s $62 million annual general fund budget, which is fed by property and sales taxes, goes to public safety, Brown said. Officials project that number will swell to about $43 million by 2028.
The overall budget, which includes revenue from water and sewer charges, city service fees and other streams was $140 million, according to the city’s 2023 budget.
Galveston has about twice the number of police officers and firefighters of comparable Texas cities, which is driving up public safety costs to a worrying degree, said City Manager Brian Maxwell,
“That’s due to the fact that we have such high demand here,” Maxwell said. “Public safety is probably the most expensive thing we do.
“Our ad valorem property tax does not even pay for our public safety, and that puts us in a very difficult situation. Our property taxes can’t even pay for our police and fire departments. It takes all of our property tax and a third of our sales tax to pay for police and fire. That doesn’t cover things like EMS or the Marshall service.
“It consumes a large percent of our budget, and it’s one of our fastest-growing expenses.”
Maxwell said he fears for other city services if public safety costs continue to balloon without revenue doing the same. The city’s public transit and park funding could be victims of the growing public safety bill, he said.
“It’s a real challenge for cities right now,” he said. “We tax 50,000, but we serve millions. That’s why we’re trying so hard to get money from cruise passengers and day-trippers. In the short term, increasing costs with the 3.5 percent tax cap will erode city services. In the long term, it’s mathematically impossible.”
He was referring to state imposed 3.5 percent cap on annual revenue growth.
Galveston police and fire pensions differ from many in the state, because the city funds its own pension plans, Brown said. Many officers and firefighters statewide are members of the Texas Municipal Retirement System, but Galveston’s are not, Brown said.
“Other cities have teetered on the brink of bankruptcy based upon the need to privately fund their pension plans, and they may not have enough money to do so,” Brown said. “That’s something in Galveston that we’ve put a lot of attention on to make sure we’re properly funded.
Galveston pays $500,000 annually in pension contributions, according to a June report. A first-year police officer can make $61,000 a year in Galveston, according to the police collective bargaining agreement effective through September. A first-year firefighter can earn $57,000 a year.
“We have our own pension plan, and that makes us a little unique,” Brown said. “For so many years, our pension plans were left unattended and not balanced properly to support our firefighters and police. Over the last four or five years, we’ve put a lot of attention here at the city to get those pension plans into state guidelines.
“We want to make sure we support our first responders. The way we can do that is with good salaries and make sure we have a pension plan that’s appropriate.”
“Not only maintaining proper support for our first responders, but other areas of our budget as we’re under that 3.5 percent tax cap. Our expenses go up more than 3.5 percent each year, so we need to make sure that we properly maintain services for the residents by increasing revenue through alternative resources.”
The council wanted to ensure new money came from the island’s millions of annual visitors — not the residents, Brown said.
“Our goal was not to increase property taxes,” he said. “Our goal was not to put an extra burden on our residents, but have that alternative revenue originate from those who come down and enjoy our island.”
That’s why the city council has initiated ordinances like the cruise tariff and long-term parking fee, Brown said. Council members Thursday approved a $1.15-a-day fee for cars in long-term parking lots, which Brown said would pump up to $1.4 million each year to the city’s general fund from the buoyant cruise industry.
City leaders and Port of Galveston trustees are finalizing an ordinance that adds a 50-cent tariff on cruise tickets, which officials said would bring an additional $1 million to the city. That money would help the city maintain infrastructure wear and tear driven by more than a million annual cruise passengers who sail each year from the city’s port.
Council will receive an update from city staff regarding the alternative revenue list in a March or April meeting, Brown said.
“These alternative revenue sources have a bearing also to allow council, at our next budget, to look at reducing our property taxes even more,” he said.
“This council has been reducing property taxes every year for the past four or five years. With these alternative revenue sources, as they go up, that gives us the ability to decrease property taxes even more.”
ADDENDUM: Galveston's pension plan may not be solvent. Several years ago they attempted to merge their plan with the Texas Municipal Retirement System (TMRS). Most cities have TMRS state retirement plans. TMRS would not take on Galveston's liabilities. Galveston PD doesn't mention this in their recruiting efforts. - Trey Rusk
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