Texas code limits how sales tax dollars collected for the Ready to Work program can be used, Segovia told Jones and City Council in a memo Thursday.
Transferring Ready to Work’s balance — which amounts to more than $120 million — to the city’s general fund “for unrelated expenditures, such as drainage, streets, or other general municipal operations, would likely be viewed as inconsistent with the statutory dedication of this tax,” Segovia said in his memo.
In other words, such a transfer could put the city at risk of being sued — though it’s unclear by whom.
The $1.7 billion general fund pays for basic city services, such as police and fire protection, libraries and street maintenance.
The law the city used to create Ready to Work only allows sales taxes to be spent on job training, early childhood development, after-school programs, college scholarships and literacy programs, Segovia said.
Jones proposed on Tuesday using Ready to Work money to help close the $158 million general fund deficit the city faces over the next two fiscal years. Doing so would kill the four-year-old program, one of Mayor Ron Nirenberg’s signature initiatives.
Jone also suggested using the Ready to Work money to pay for projects that would otherwise be funded through a bond program.
After Segovia sent his memo, she said she still thinks it’s worth putting the job-training dollars to a new use, rather than using them to reimburse residents who complete an industry-recognized certificate or bachelor’s degree through the program.
“I appreciate that the City Attorney has now told us that if the voters elected to, Ready to Work funds could potentially be used to pay for qualified programs currently paid for out of the General Fund, services like literacy programs, after-school programs, and early childhood education,” Jones said in a statement. “Diverting Ready to Work funds for qualified programs may then free up General Fund money for core services like public safety and drainage, and helps to minimize potential budget cuts and property tax increases.”
Qualified programs likely amount to only a small fraction of the general fund. Almost 64% of the current general fund budget pays for public safety, which includes police and fire.
The city devoted 1/8-cent of its sales tax it collected from December 2021 through December 2025 to pay for Ready to Work. Almost 17,000 people have enrolled in the program, which is expected to have funding through 2029.