City plans to keep prop­erty tax rate as is

Austin American-Statesman - - COMMUNITY NEWS - By Andy Sevilla asevilla@ac­n­news­pa­pers.com

The city of Bas­trop is propos­ing to keep its prop­erty tax rate flat for fis­cal year 2017-18, main­tain­ing the rate at 56.4 cents per $100 prop­erty val­u­a­tion, ac­cord­ing to a res­o­lu­tion the City Coun­cil ap­proved last week.

Though no in­crease on the rate is pro­posed, the city could see a boost of $221,000 in its ad val­orem rev­enue next year be­cause home val­ues in Bas­trop County in­creased on av­er­age by 16 per­cent this year, ac­cord­ing to pre­lim­i­nary data from the Bas­trop Cen­tral Ap­praisal Dis­trict.

The ef­fec­tive tax rate, or the prop­erty tax rate that would pro­vide the city with about the same amount of rev­enue it re­ceived in the pre­vi­ous fis­cal year, is 53.83 cents per $100 val­u­a­tion. The roll­back rate, or the max­i­mum tax rate the city can as­sess with­out be­ing sub­ject to a roll­back pe­ti­tion, has been cal­cu­lated at 57.33 cents per $100 val­u­a­tion.

Prop­erty tax rev­enue will make up 31 per­cent of the city’s to­tal rev­enue for fis­cal year 2018, said City Man­ager Lynda Hum­ble. Forty-two per­cent of the city’s to­tal rev­enue comes from sales tax col­lec­tions.

“We have a sig­nif­i­cant need to di­ver­sify our rev­enue sources and in­crease our tax base,” Hum­ble said at a July 20 bud­get work­shop.

“Less than a third of our rev­enue sources are sta­ble,” she said. “Most of the time, your prop­erty tax is sta­ble be­cause in nor­mal sit­u­a­tions your ap­praisal dis­trict will reap­praise a third of their tax roll every year, with the ex­pec­ta­tion over a three-year pe­riod of time they will re­view all of the as­sess­ments.”

Hum­ble said the city’s high de­pen­dence on sales tax rev­enue makes her ner­vous, as those col­lec­tions fluc­tu­ate with con­sumer con­fi­dence.

“The more wealthy you feel, the more you spend,” she said. “The poorer you feel, the less you spend,” and many lo­cal, na­tional and global fac­tors can in­flu­ence how con­sumers spend.

“Be­cause we don’t have a lot of fluff in the bud­get, if we were to lose $1 mil­lion in rev­enue — be­cause that’s the dif­fer­ence be­tween sales tax and ad val­orem tax, it’s about $1.1 mil­lion — if we were to lose that, we would make real cuts for ser­vice and we would be lay­ing peo­ple off,” Hum­ble said. “So, it makes me re­ally ner­vous as your city man­ager. It should make you very ner­vous as coun­cil and the com­mu­nity.”

In July, Bas­trop saw a 5-per­cent de­crease in its sales tax rev­enue com­pared with the same month in 2016. Bas­trop County, El­gin and Smithville all had sales tax growth.

“We’ve got to sta­bi­lize our sales tax while we grow our prop­erty tax,” Hum­ble said.

Tourism is the city’s op­por­tu­nity to grow its sales tax rev­enue, she said. A des­ti­na­tion mar­ket­ing or­ga­ni­za­tion was formed in the city this year to at­tract tourists and mar­ket Bas­trop.

Ex­pand­ing Bas­trop prop­erty tax val­u­a­tions through devel­op­ment and an­nex­a­tion to di­ver­sify the city’s de­pen­dence on sales taxes is among Hum­ble’s goals for the up­com­ing fis­cal year.

Un­der the cur­rent prop­erty val­u­a­tions, 1 cent in the prop­erty tax rate pro­duces $87,000 in rev­enue for the city. Hum­ble said she wants a penny on the tax rate to pro­duce more — and for that to hap­pen, Bas­trop needs to in­crease the num­ber of prop­er­ties on its tax rolls.

The city will have two pub­lic hear­ings on the pro­posed tax rate, Aug. 22 and Sept. 12, be­fore the coun­cil votes to set the rate.

Round Rock life­guards Brit­tany Al­lum­baugh, as the res­cuer, and Lo­gan McDaniel, play­ing the vic­tim, com­pete at the event. Mul­ti­ple com­pli­ca­tions were thrown at the teams to add in­ten­sity to each sce­nario.

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