Tom Green County Dumps Downtown TIRZ

SAN ANGELO, TX — Tom Green County Commissioners Court voted 5-0 on July 7 to withdraw from the Tax Increment Reinvestment Zone (TIRZ) that covers downtown San Angelo and surrounding commercial corridors.  

The motion was made by Precinct 4 Commissioner Shawn Nanny and seconded by Precinct 3 Commissioner Rick Bacon. Discussion was brief.  

“I don’t see what this is doing for us now. It’s done for us already what it’s going to do,” Nanny said, opening the short discussion.  

The action ends the county’s contribution of approximately $1.15 million per year in tax increment revenue that previously flowed into the special TIRZ fund managed by the City of San Angelo. That money will now remain with the county for its general fund and budget priorities.

The TIRZ was created in 2006 through a partnership between the City of San Angelo and Tom Green County under Chapter 311 of the Texas Tax Code (the Tax Increment Financing Act). It captures the increase in property tax revenue generated by rising appraised values above a frozen base year within a designated zone that runs primarily along Chadbourne Street and Bryant Boulevard from Avenue D / Washington Drive northward to the 29th Street area.  

Those “captured” increments from participating taxing units are deposited into a special fund used for revitalization projects—primarily grants to private property owners for façade improvements, fire-sprinkler systems, secondary exits, ADA accessibility upgrades, asbestos abatement, and similar work. The TIRZ Board of Directors makes recommendations; the San Angelo City Council has final approval authority.  

Under Texas Tax Code § 311.013(f), a taxing unit other than the creating entity (here, the city) is **not required** to contribute any of its tax increment unless it enters into a written agreement specifying the portion of the increment and the years it will be paid. The agreement is binding only while it remains in effect.  

Because participation is voluntary and contractual, a county may terminate or withdraw from the agreement. Once it does, the county is no longer obligated to remit the increment and retains 100% of the property taxes it collects on the captured value for its own use. Remaining money already in the TIRZ fund is handled separately under § 311.014(d) (proportional return after all obligations are paid upon full zone termination).  

County Judge Lane Carter noted the court is in the middle of FY 2027 budget planning. The tax rate will be set for the year beginning Oct. 1. While the precise impact on the no-new-revenue rate and voter-approval rate is still being calculated, commissioners viewed the exit as cash-positive. The roughly $1.15 million is enough to fund a district court operation and more.

The San Angelo TIRZ was championed by downtown visionaries including Lee Pfluger and former Mayor Brenda Gunter as a tool to make renovation of century-old buildings more financially viable than demolition and new construction. Higher costs for modern fire codes, ADA restrooms, and other regulations made public incentives necessary to attract private investment.  

In recent years the program has faced criticism. Non-profit organizations have been denied grants under longstanding city policy that restricts funding to taxpaying entities (because non-profits do not generate the property tax increments that replenish the fund). The city has also used TIRZ money at times for street and sidewalk work.  

The TIRZ fund currently holds more than $3 million, with the majority earmarked for the northern portion of the zone (north of 3rd Street). Mayor Tom Thompson said relatively few businesses in the north zone apply for assistance and that the city intends to continue its own participation. “TIRZ still serves its purpose,” Thompson said.  

City property tax rate is $0.7947 per $100 valuation; the county rate is approximately $0.47. The city contributes the larger share of TIRZ revenue.

The county’s withdrawal does not dissolve the TIRZ itself. The city remains the creating entity and can continue the zone with its own increment and any other remaining participants. Property owners inside the zone may still apply for grants funded by the city’s contribution.