At least two council members will try to lower proposed tax rate, Mayor Webster leaves door slightly ajar

(Updated Monday, Aug. 31, at 5 p.m.)
Near the end of this article the subject of the Hays Consolidated Independent School District not offering a free port exemption was raised by Mayor Todd Webster. I reached out to the Hays CISD about this and received the following reply from Tim Savoy, the district's public information officer:

"Hays CISD Superintendent Michael McKie and Deputy Superintendent Carter Scherff met with the Greater San Marcos Partnership for the first time on Friday. The district will be working with Moak, Casey, and Associates to do an analysis of how the exemption would affect the school district before we make a decision. There is a potential that it would not only affect our tax revenue, but also our funding from the state. We hope to have the Moak Casey report in the coming weeks and we will go from there."

(Original Post)
Mayor Todd Webster says, while there are some budget reductions he could support, he believes the proposed 26 percent property tax rate hike "is necessary to properly run this city." At least two other council members, however, dispute that notion including one who believes the tax rate can be reduced from its current level.

Webster also said it was the Hays Consolidated School District that is "the single biggest obstacle to us landing the game-changing large scale employer that would truly drive down the rate as well as providing great jobs for people who live here." The claim, however, seems a little dubious and I am seeking a reaction to this statement from the Hays CISD.

As usual, Webster was disingenuous, at best, and outright spreading falsehoods, at worst, in a statement he posted recently to a neighborhood website. For example, he wrote "Most of the suggestions I have heard (to reduce the rate hike) have been to cut capital expenditures for equipment and other physical improvements." Now capital expenditures do not come from the General Fund so reducing them would have absolutely no effect on the tax rate. Either Webster doesn’t know this, which makes him stupid, or he does know it, which makes him a demagogue.

Then he goes on to spread the lie he proffered at the first tax rate public hearing Aug. 18, but, at least, didn’t repeat at last Wednesday’s hearing. "There will need to be $1.6M in cuts to offset the entirety of the rate increase, which is an increase resulting from the road bonds and paying down some additional debt." This is simply not true. The rate increase is also needed to pay for an additional 20 new city government employees, including five additional police officers, new equipment and $1.5 million for the creation of "Internal Service Funds for Equipment, Fleet and Facility."

Not that all of these additions are not wanted or even, in many cases, needed; but Webster should simply not be repeating the lie that the entire tax hike is due to the road bonds,

Speaker after speaker at the two public hearings on the rate hike pleaded with the council to lower the rate. Their pleas appear to have fallen on deaf ears when it comes to the mayor, but at least two other council members have heard them. One told me right after Wednesday’s meeting it is guaranteed amendments will be offered to reduce the proposed rate of $.6145 per $100 valuation because that particular council member plans to offer them.. (The current tax rate is $.5383 and the effective tax rate — the rate that would bring in the same amount of revenue as the current year — is $.4870.)

Another council member plans to introduce enough amendments to actually reduce the rate to $50455, 3.3 cents lower than the current rate. "However, we have several factors that have not been finalized yet," this official told me. "That includes a possible increase from the EMS contract. I keep hearing the cost of the EMS contract is going to go up by over $200k. I also want to make sure our Police and Fire have all they need. So this is just a starting point for me."

In his statement to the neighborhood website, Webster said:

"Based on the severe deficiency in the city’s capacity to provide the services a city of 45,000 people should be getting, I think this budget, particularly the additional staff for police and utilities is catching up to where the city needs to be. While there are certainly places where some reductions could be made, there will be consequences to those reductions. Most of the suggestions I have heard have been to cut capital expenditures for equipment and other physical improvements, There will need to be $1.6M in cuts to offset the entirety of the rate increase resulting from the road bonds and paying down some additional debt. Some on the city council appear to recognize the budget and the tax increase as an opportunity to score political points. I suppose that is to be expected. For me, I am going to make a decision on this budget based on what I understand is necessary to properly run this city and provide the citizens the level of services that I regularly hear that they want. Many of the additional positions and capital projects are what citizens have been demanding while others are desperately needed items, such as waste water system fixes, that are not visible to most taxpayers. There are some reductions I can support and I am looking forward to seeing what some of the council members’ suggestions (are). As for commercial development offsetting residential taxes, I think we will need to land an additional $1 billion in commercial tax base to see a noticeable impact. To truly have a good chance at doing that, we are going to need the school district, which is the largest taxing entity on your tax bill, to do what other districts have done and adopt a free port exemption. Not having that is the single biggest obstacle to us landing the game-changing large scale employer that would truly drive down the rate as well as providing great jobs for people who live here. Right now, we are excluded from consideration from most if not all major manufacturing and distribution projects because of not having it."

The question remains, however, is how granting tax exemptions is going to allow for commercial development to offset residential taxes. I have reached out to Merideth Keller, president of the Hays CISD board of trustees, for her reaction to the mayor’s statement and will update this post when and if I receive a reply.