One City Council member and small-business owner is attempting to help Kyle businesses thrive through a tax rebate program.

District 1 Council Member Travis Mitchell said he hopes his plan will help foster more small-business growth in the city. 

“[Small businesses] add to the lifeblood to the community and give your community character,” Kyle Economic Development Director Diana Blank-Torres said.

First Year On Us plan

To level the playing field with larger companies that may receive economic development incentives and tax breaks, Mitchell came up with the First Year on Us plan, which he calls “a micro-developer agreement” that would give small businesses “a fair shake.”

“It’s a scaled-down agreement that is, in essence, exactly the kind of agreement we give to large developers,” he said.

The proposal would allow for a first-year tax break on improvement value generated on commercial property, Mitchell said. The plan could be used as a marketing tool to convince people to invest in Kyle.

If the owner builds something to increase the value of the property, a portion of that new tax value generated goes to the city. Under Mitchell’s proposal, the city would credit some of the newly generated tax back the business—most likely in the form of reimbursement, he said.

The plan would help small businesses when they are likely to struggle with cash flow. The American economy has developed in a way that is conducive to large businesses, he said.

“A big business can afford to come in with major infrastructure projects that cost millions of dollars, because they know what they’re doing and have the pockets to accomplish their goals,” he said. “Small businesses very seldom have that.”

Owner-occupied businesses would receive an additional boost because they tend to be local and involved in the community, Mitchell said. They would be able to apply for a one-time tax rebate of up to $5,000 for improvements. Commercial property owners and businesses that are not owner-occupied would be eligible for the same credit—but only up to $2,500.

“We want the program to be extremely simple,” Mitchell said. “With each layer [of rules] the complexity increased tenfold. We want this to be something every business owner in Kyle can utilize.”

Next steps

Generally, feedback from the community and small-business owners has been positive toward the proposal, he said, and council was receptive to the idea. As it stands, the proposal will be voted upon in early March.

Blank-Torres is drafting the proposal that will go before City Council.

“I think this is going to be kind of a renewed focus on how we can reach out and help small businesses in Kyle and make them realize we do recognize the importance of them,” she said. “We want them here, and we want to embrace them and help them thrive and grow. It’s just [a matter of] finding the right tool.”

Mitchell said there has been talk of “giving the plan more teeth” by incorporating additional credits for job creation, sales tax and other aspects.

“It’s very important that the citizens and current residents of Kyle realize that it’s not going to cost them tax revenue,” Mitchell said.

The proposal was intentionally designed to be a credit against future increases in revenue so that it does not come out of Kyle’s tax base, he said.

“It’s not a flashy proposal. That’s the point,” Mitchell said. “Square deals are never flashy.”

Local reaction, prior program

“I think it’s a step in the right direction,” said Gordon Wybo, owner of Sustainacycle’s Sustainable Living Center.

The council and the city could do more to promote local and small businesses, he said.

“Anybody that wants to invest in the city of Kyle should have council’s ear right away, because they’re going to bring in tax money; they’re going to bring in tourism; they’re going to bring in something if their business succeeds,” Wybo said.

Wybo said he thinks the city should hire a liaison to encourage small-business investment in Kyle.

“They should have somebody bending over backwards to help them,” Wybo said. “Those small business are making an investment in the city. If you’re investing in the city, then the city should invest in you.”

The city previously had a downtown facade improvement program, but it was limited in scope, Blank-Torres said. The program was defunded because it “wasn’t really serving its purpose anymore,” she said.

“Because the grant program was kind of waning, there could have been a perception that the city was losing interest in the small-business arena because the program wasn’t fully funded anymore,” Blank-Torres said. “We don’t want that to be the perception.”

Blank-Torres said she hopes the proposal will help Kyle small businesses.

“It’s not going to be the end-all be-all for everybody, I’m sure,” she said. “Hopefully, it would be a start.”

Small business, big impact

According to U.S. Census Bureau statistics, small businesses employed 4.6 million people, or 45.9 percent of the private workforce, in Texas in 2014.

Money spent at a small business is also more likely to stay within the community, said Joe Harper, director of the Small Business Development Center at Texas State University.

“[Small businesses] are the ones that sort of drive the local economy in their community,” he said.

Small businesses typically spend money within the community, which keeps it circulating, but large businesses have a tendency to be owned by an outside entity, he said. Money coming into that business may not necessarily stay in that community, he said.

“If a small business is started in a community, the preponderance of its resources are bought and sold there, and the money stays there,” Harper said. “Then that’s what helps the local economy.”