Friendswood City Council on Monday opted to set the 2015 city tax rate the same as the fiscal year 2014, though not all agreed.
The total rate remains flat at $.5914 per $100 of assessed value, but Councilman John Scott put forth an initial motion to instead adopt the effective tax rate – which is 1.7 cents lower. This is due to an increase in value, about half of which is due to new construction primarily on the Galveston County side of the city, according to city documents.
Scott pointed out that the effective rate would basically keep homeowners’ tax bills the same.
Scott and Councilman Pat McGinnis then voted against the approval of the tax rate and budget for fiscal year 2015, which began Oct. 1.
Scott asserted, as he has in previous meetings, that he would approve of collecting the additional monies for the purpose of paying down debt.
Others had argued that, particularly with new facilities coming online, the added revenue will be needed for maintaining city infrastructure so that future debt for repairs doesn’t become necessary.
Discussed during a work session Monday was the possibility of making use of an available half cent of sales tax revenue. The Texas state sales and use tax rate is 6.25 percent, but local taxing jurisdictions (cities, counties, special purpose districts and transit authorities) can also impose sales and use tax up to 2 percent for a total maximum combined rate of 8.25 percent. Friendswood, however, does not make use of the entire 2 percent local sales tax.
The existence of the extra 2 cents have been long discussed among city leaders and residents. Street maintenance, economic development and municipal development are among the options for the extra revenue that could be collected and returned by the state.
One option that met with initial approval by council members is street maintenance.
“I get asked at least two or three times a month why don’t we collect this money,” Councilman Jim Hill said. “I think we need to form a committee and choose wisely on how to spend it. I know streets would be a great way to use that fund.”
“It is something that could carve a $500,000 line item out of the budget,” Mayor Holland added.
No action was taken Monday regarding the item. The council agreed that input from a citizen advisory group would likely be the best route to take in opening up discussion on the half-cent sales tax use.