Looking at a lengthy wish list of equipment and improvements, Friendswood City Council is opting to go two cents over the 2015-16 effective tax rate for the coming fiscal year.
Due in part to new construction within the city, Friendswood ‘s effective rate – or that which would keep revenue level – is 54.8 cents per $100 of valuation, lower than the current rate of 59 cents per $100 valuation.
Councilman John Scott, who argued to go with the effective rate, points out that the proposed rate of 56.8 cents per $100 of valuation isn’t a tax cut.
“Anything above the effective rate is a tax increase,” he said.
Because of this, two public hearings are required to be held before the rate can be finalized. The first of those two public hearings is Sept. 28.
The budget and tax rate are set to be adopted on Oct. 5.
Councilman Steve Rockey was among those supporting going 2 cents over the effective rate.
“We’ve already seen our bond projects are coming in high, and we have a commitment to the citizens to get those done,” he said.
Councilman Jim Hill commented: “I see where the county taxes are higher than our city taxes, but I will tell people right now: We get big bang for our buck when we pay City of Friendswood taxes and I’m not sure we get a lot of return from Galveston County.”
“Retired and unemployed as I am, I can support $3 a month,” Hill said, referring to the estimated monthly increase the added 2 cents would mean for homeowners.
Councilman Scott argued for the effective rate last year.
“Some of the argument for keeping it where it was was so we can soften the blow of the bond money,” he said. “That doesn’t make sense.”
“We have this discussion every year. What do we do with the tax rate? Last year we held it higher than the effective tax rate would have called for, and council justified it. Now again for the second year in a row, instead of adopting the effective tax rate in a bad economy, we’re going to raise the rate to fund decision packages,” Scott said, “when you could write a check for everything up there with what you’ve already collected.”
Scott said funds over the city’s required 90-day reserve are available to spend, since it is money that was over-collected.
“I don’t think the economy is bad right now,” Rockey said. “Every single bond project is going to come in over budget. The citizens gave us the right to increase our taxes by 5 cents back when the rate was 60 cents, yet we’re going to be at 55 cents.”
Council did agree last Monday to fund approximately $150,000 of the projects off its “decision package” list out of the city’s fund balance.
The city’s budget year runs from Oct. 1 through Sept. 30.
Council meets at City Hall, 910 S. Friendswood Dr. Full agendas are posted on the city’s website, www.friendswood.tx.us.