City Council considers 1/8 cent sales tax for workforce development

Plan to use $154M over four years, agreement with VIA to use tax for transportation afterward

SAN ANTONIO – The San Antonio City Council is considering using a 1/8 cent sales tax to fund a four-year program to help 40,000 out of work or under-employed San Antonio residents move into higher-paying careers.

In their first B-session meeting after the July break, city council members discussed the initial outline of a four-year program that would funnel $154 million of local tax dollars toward job training, education, and wraparound services for participants. The ultimate goal would be to place people into career pathways with jobs that pay at least $15 an hour plus benefits.

Mayor Ron Nirenberg is pushing for the initiative to help the city recover from the COVID-19 pandemic and help it grow beyond where it was.

“San Antonio doesn’t have to be one of the poorest big cities in the country,” Nirenberg said in an interview with KSAT before the meeting.

The council can only order the election to put the sales tax initiative in front of San Antonio voters who would have the final say. To get the issue onto the Nov. 3 ballot, the council would need to act by Aug. 17.

The plan does not involve a tax increase. Instead, voters would be asked to redirect the 1/8 cent that funds Linear Creekways and the Edwards Aquifer Protection Program after its current use expires. The tax is expected to reach its voter-approved limit of $180 million cap, which is expected to be by April 2021.

City council members have already approved a short-term workforce development program as part of the $191 million Recovery & Resiliency Plan that is meant to help up to another 10,000 people. However, that $75 million effort will only last through September and is only for workforce training.

While both the short-term program and the proposed, tax-funded plan would include “wraparound support” for the participants, the short-term program also provides stipends to participants while they are training. As it was presented Wednesday, the newer, sales tax-funded program would not provide such stipends, though it would offer emergency assistance for things like car repairs on a case-by-case basis.

Nirenberg believes using the sales tax for workforce development would cause a “huge” shift in the city’s workforce.

“This will be one of the largest, most impactful economic initiatives ever undertaken by the city of San Antonio as a community,” he said.

While the goal is to make a permanent change, in accordance with a deal with VIA Metropolitan Transit officials that was announced in July, the program itself would not be.

The mayor had initially pushed to use the 1/8 cent for transportation funding, but he shifted priorities after the pandemic put tens of thousands of San Antonians out of work.

However, VIA officials had appeared ready in July to push forward with calling an election to send the tax to the Advanced Transportation District (ATD), of which VIA gets half the money.

However, the two sides struck a deal that the city would temporarily get a chance to use the tax for economic recovery before it permanently switched to the ATD.

The VIA board, which also serves as the ATD board, has scheduled a special meeting for Aug. 13 to discuss its own ballot initiative, which it also hopes to get onto the November ballot. A spokeswoman said the exact language for the initiative has not yet been finalized.

The plan the city council is considering is not final either. The Tuesday meeting served as a feedback session for council members to raise any concerns or issues about the plan.

Economic Development Department Director Alejandra Lopez told the council that 154,000 San Antonio workers have filed for unemployment since mid-March. She did not clarify if that was just within the city itself or, more likely, the entire metropolitan statistical area, which stretches up to New Braunfels.

About one-third of those workers came from the accommodations and food services, retail, or health care and social assistance industries, she said. Referencing a June presentation by economists Steve Nivin and John Hockeynos in which they projected out the effects of the pandemic, Lopez said, many of the workers may not have jobs to which to return when the pandemic is over.

“And at the top of that industry list is accommodations and food services, where the projections show that approximately 20 percent of the jobs in this industry that were lost this year will not return for the next five years,” Lopez said.

However, she said the “Education and Workforce Leadership Team” the mayor put together in July provided feedback that “job openings for skilled workers currently exist and they will remain.”

In her presentation, Lopez gave examples like logistics associates, truck drivers, certified nursing aids, and child development associates as jobs with “nominal barriers to entry” that could be achieved with stackable, short term certificates ranging from two to 12 weeks.

Meanwhile cyber security, manufacturing, and bioscience were provided as possible goals for two or four-year degree programs.

Some council members appeared skeptical or had suggestions.

District 5 Councilwoman Shirley Gonzales said the idea “appears to the same program that we’ve seen over the years, just with additional funding” and she didn’t see a focus on the poorest 20 percent of the community.

“I just feel like at the end of the four years, we’re not really going to see the impact that we want to see because we didn’t target our effort on the bottom 20 percent,” she said.

District 1 Councilman Roberto Trevino said the city needed to be aware of the future of some of the careers, questioning, as an example, whether the city should be investing in truck driving given the progress of autonomous vehicles.

“It’s like throwing a football. We’ve got we’ve got to aim where things are gonna be, not where they are now,” Trevino said.

The council members are expected to discuss the plan on Aug. 11 before a possible vote on Aug. 13.

District 9 Councilman John Courage asked what the plans were for the EAPP and Linear Creekway Parks if the tax is diverted.

City Manager Erik Walsh said the city has options for the EAPP, including a plan city staff had suggested before the pandemic that the city use a portion of the money SAWS sends the city each year. Even if the current funding source were taken away, he said, the city’s Parks Department expects to have enough money to continue purchasing properties and easements until the end of 2022.

As for the Linear Creekway Parks, a Bexar County spokeswoman said the commissioners have discussed taking over their expansion as a capital project, but because of the pandemic’s effect on the county budget, it’s not yet clear what the timeline for that would be.

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