The Kyle Report

The Kyle Report

Tuesday, July 28, 2015

14 percent property tax rate hike possible

Obviously nothing is set in stone at this time, but it’s possible that City Manager Scott Sellers is going to ask the City Council to try and sell constituents a 14 percent property tax rate hike for the next fiscal year. This on top of what is projected to be at least a 14 percent hike in property values.

According to the agenda posted today for Saturday’s council budget workshop, Sellers is, as of this moment, seeking a property tax rate of $.6146 per $100 valuation. That means a person whose property tax on a $150,000 home last year was $807.45 might pay as much this year as $1,050.97 on a home that’s now valued at around $171,000. That, of course, doesn’t include school, county and other taxes.

I say "as of this moment" because the agenda item states the proposed hike "is an estimated tax rate and is subject to change pending certified taxable property valuations due on July 31, 2015." However, one of the reasons it has taken this long to receive the certified tax rolls is because so many residents are appealing their valuations. Depending on the outcome of those appeals, it could render Sellers’s estimate on the low side. To be fair, however, many of those appeals are from Hays County property owners who suffered property damage from the May floods and the overwhelming majority of those are outside of Kyle.

Regardless, this much of a property tax increase could prove to be a tough sell and might even trigger a rollback election. The problem is most of the increase is necessary to pay for the bonds issued to cover the costs of the 2013 road projects. The really bad news here is that the first year’s payments are probably going to be the lowest and property taxes might even have to be raised much higher in subsequent years to pay off the city’s debt.

To give you an idea of the tax rates of other cities in Hays County: Uhland $.206, Buda $.2978, San Marcos $.5302, Hays $.1164, Mountain City $.123, Woodcreek $.1305, Niederwald $.288 and Dripping Springs $.17.

To give you an idea of the tax rates of other cities with a population comparable to Kyle: Farmers Branch $.602267, Lake Jackson $.3875, Big Spring $.85664, Cleburne $.804018, Waxahachie $.68, Rosenberg $.49 and Deer Park $.72. These numbers are all over the map, but it does illustrate Kyle’s proposed rate is not that much out of whack compared to cities with a similar population. It is higher than three of them and lower than four. And of that latter four, I would argue the rate proposed by Sellers is significantly lower than that of Big Spring, Cleburne and Deer Park.

The council will discuss Sellers’s proposed budget at its council workshop Saturday and then conduct two meetings, the first on Aug. 19 and the second on Aug. 26, designed to gather the public’s input on the proposed budget. Over the next six days, council members will make their changes and then bring it back for a first reading Sept. 1 with final passage scheduled for Sept. 8. The new budget takes effect Oct. 1.

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