San Angelo Should Abolish the Hog-Tied TIRZ

OPINION — The Tax Increment Reinvestment Zone (TIRZ) in San Angelo has outlived its usefulness and should be abolished. It represents poor stewardship of property tax revenue, is fundamentally flawed in its implementation, and disproportionately benefits a small group of wealthy property owners while draining resources from the broader community.

The TIRZ spans from the 29th Street Walmart to just below the Concho River, covering an area about one mile east and west of Chadbourne Street. Commercial property owners who pay property taxes can apply for one-time grants of up to $75,000 for building facade upgrades, fire sprinkler installations, or other improvements. Additionally, the TIRZ fund is often used for streetscape projects or street maintenance, depending on the city’s priorities.

While TIRZ may have been necessary in 2006 to kickstart the revitalization of downtown San Angelo, it is no longer essential. Back then, the program spurred the development of the Chadbourne corridor, transforming it into a vibrant area of bars, restaurants, and small businesses. However, the current system is hamstrung by an artificial division into northern and southern zones, resulting in an inefficient and inequitable allocation of resources.

From the outset, city leaders split the TIRZ into two zones: northern and southern. This decision locked significant tax revenue from the 29th Street Walmart area into the northern zone, which has experienced little development, while leaving the southern zone—where most growth occurs—chronically underfunded. The result is a lopsided system where funds from the northern TIRZ accumulate unused, while the southern TIRZ struggles to support meaningful projects.

In economic terms, the city’s policy is akin to withholding reinforcements where the battle for growth is being fought. Most development and activity occur south of the Houston Harte Expressway, yet the northern zone’s reserves remain untapped. This mismanagement is a missed opportunity to maximize the impact of taxpayer dollars.

Under the TIRZ program, property tax revenue generated by increased property values within the zone is diverted away from the city’s and county’s general revenue funds. Instead, this revenue remains sequestered, available only for TIRZ-related projects and grants. This arrangement costs the county approximately $650,000 annually and the city roughly $1 million—a total of over $1.5 million that could be put to better use.

For perspective, $1 million could cover nearly half the salary increases requested by the San Angelo Police Department. At the county level, $650,000 could fund an entire department in the criminal justice system. Meanwhile, taxpayers across the city and county continue to subsidize TIRZ grants that primarily benefit a small group of commercial property owners.

Proponents argue that TIRZ funds are necessary for revitalization, but in areas like the northern TIRZ, crime rates—not outdated facades—are the primary deterrent to economic development. TIRZ funds cannot address the root causes of economic stagnation in these areas, making the program largely ineffective.

TIRZ Board President Jon Mark Hogg has lamented the inability to provide TIRZ grants to nonprofit organizations within the TIRZ, without explicitly citing the example of Reverend Theodore Boone’s Ministerial Alliance on Martin Luther King Boulevard. However, Mayor Brenda Gunter counters that nonprofits, which do not pay property taxes, should not receive benefits funded by commercial taxpayers. While both sides make valid points, the debate underscores the deeper issue: TIRZ is a public policy that no longer serves its intended purpose.

The TIRZ program has also faced criticism for disincentivizing property improvements in some areas. Property owners on MLK Boulevard, for example, are reluctant to invest in their buildings due to fears of increased property taxes. Reverend Boone argues that nonprofits should lead the way in revitalizing these neighborhoods, but TIRZ policies effectively exclude them, limiting growth.

Taxpayers need to ask hard questions: What is the opportunity cost of maintaining the TIRZ? Could the $1.5 million annually sequestered into TIRZ fund accounts be better spent on essential services or reducing property tax rates? For many homeowners in neighborhoods like Southland, the benefits of TIRZ are unclear, if they exist at all.

While TIRZ played a crucial role in revitalizing parts of downtown San Angelo in the past, it is now a relic of a bygone era. Public officials must reconsider whether continuing the program is worth the cost to cash-strapped city and county budgets. Without significant reform—or outright abolition—the TIRZ risks remaining an ineffective, inequitable drain on taxpayers. It’s time for San Angelo to move forward with better, more effective and equitable public policies and TIRZ isn't one of them.