Providing maintenance and services for a fast-growing city is proving difficult this year, as Pearland leaders work to balance revenues with expenses for the coming year.
“(Property tax rates) are obviously a big driver for the budget upcoming,” City Manager Clay Pearson said. “We had strong new construction and revaluations despite some of the uncertainties going on in the national economy, and with energy in our metro area. Valuations from the various assessors show us hitting just over $7 billion. That’s a big positive and it gives us some options.”
There is good news this year, he said.
With the city’s debt service estimated to decrease because of refinancing and an increase in tax base, the city’s operating and maintenance tax could be increased and would still produce a total tax rate below the current year’s rate.
“We could lower the overall rate, and we could still increase the operating rate by 2 cents, for instance, which would provide additional resources,” Pearson said.
The council met Saturday morning in the first of a series of budget workshops addressing the coming year’s city budget.
The city must adopt its tax rate and budget by the last meeting of September; the city’s fiscal year begins on Oct. 1.
The proposed budget includes a 4 percent projected growth in sales tax, which is budgeted at $20.5 million in 2016-17 – 28 percent of total revenues. Total revenues are estimated at $72.2 million, with expenditures at $74.9 million.
“We do have an operating deficit projected for next year,” Pearson said. “That’s assuming property tax is at the rollback rate. We can use fund balance to draw down and bridge that gap, but that’s something we don’t want to do long-term.”
The fund balance, he added, is at the minimum requirements, which is particularly concerning.
Future budget discussions are set for Aug. 15, Aug. 22, Aug. 29 and Sept. 6.
A first reading to adopt the budget and tax rate is set Sept. 12, with a final reading on Sept. 19.
For background or more information about public meetings, visit pearlandtx.gov.
Story by Nicole Jones