County Assistance District Proposition

During this November’s general election, some voters in Cass County will be able to vote for a county assistance district. Many Texas counties find it challenging to fund public services, projects, and programs. Texas authorizes all counties to create county assistance districts and to adopt a local sales tax to finance these important public purposes.

With voter approval, county assistance districts allow the county to receive sales tax revenue from the unincorporated areas of the county where a local entity isn’t already collecting a sales tax. County assistance district funds can be used for a variety of purposes. If adopted in Cass County, however, the county intends to narrowly focus any revenue from the assistance district toward county roads and infrastructure, economic development, and debt reduction. Since counties in Texas are limited in their revenue growth to 3.5% year over year, revenue derived from the county assistance district sales and use tax will offset revenue ordinarily received through property taxes.

As sales tax revenue grows, property tax rates should decline. Ballot language for county assistance district elections is directed by statute. At the election, the ballot must allow voters the choice of voting for or against the proposition. The ballot language is required by the Local Government Code to create the district and adopt the local sales tax rate. Local sales tax rates are capped at 2%. Most cities as well as Emergency Services District Three (ESD3) are already at the 2% cap.

The Cass County assistance district would exclude the incorporated areas of the county and ESD3. The proposed rate for the district is 1.75% which leaves .25% under the cap for any potential future ESD organization. The ballot language in November will be as follows: “Authorizing the creation of the Cass County Assistance District No. 1 and the imposition of a sales and use tax at the rate of 1.75% percent for the purpose of financing the operations of the district.” According to the State Comptroller’s office, revenue projection for the proposed Cass County Assistance District No. 1 is currently less than $10,000 a month. There aren’t many retailers outside the incorporated areas who would collect these sales taxes. However, in Texas, sales tax follows the point of delivery.

This means when citizens make purchases online from a vendor with a physical location in Texas, sales tax is collected. For example, vendors like Amazon collect sales tax and remit to the state. If voters elect to establish a county assistance district, those sales within the boundary of the district would see 1.75% of the sales would flow back to the county. While small now, this revenue is projected to grow as housing developments expand in rural areas of the county outside incorporated areas and as more families purchase and receive items directly shipped to their homes.

However, not all voters in Cass County will have an opportunity to vote on this measure. Those residing in an incorporated area or in ESD3 where the local 2% sales tax is already in place, will not see this proposition on their ballots in November. Only those in the unincorporated areas where the local sales tax isn’t already being collected will be able to vote on this proposition. If a majority of votes received at the election favor the creation of the district and imposition of the sales tax, the commissioner’s court, by resolution entered in the minutes of its proceedings, must declare the results of the election.

If approved in the November election, the district would begin receiving sales tax allocations from the Comptroller starting in July 2024. The commissioners court of the county serves as the governing body of the district. If you are looking for additional information about the County Assistance District Sales tax, call the Comptroller’s Data Analysis & Transparency Division at 844-519-5672.