Still smarting from an error that caused a huge budget problem last year, Pearland city staff this week presented a “structurally balanced” budget to city council.
“You’re digging out of a gigantic hole,” Councilman Alex Kamkar told Pearland city staff. “I just want to give credit. The team has worked hard and we’re spending on necessities. There’s not a whole lot of wants in here.”
Proposed is a maximum total tax rate of 65.5 cents per $100 of property value, about 10 cents above the no-new-revenue rate.
The prior year’s tax rate — which city leaders have emphasized was artificially low due to a budgeting error — was 62 cents.
“This is state law driven; you have to set a max rate,” Mayor Kevin Cole said. “You can go below it, but not above it.”
A public hearing and first reading of the budget and tax rate is set for Sept. 11, with a second reading and tax rate public hearing scheduled Sept. 25.
A valuation error last year caused an operating budget shortfall of more than $7 million, causing the city to dip into savings, rearrange debt and delay scheduled transfers into the city’s vehicle fund late last year.
“Before we discovered that error, we set the tax rate and dropped it about eight cents,” said City Manager Trent Epperson. “Obviously we had a significant hole in our budget we had to work through.”
Still, the coming year’s budget year is only a 1.5 percent increase over last year.
“The last few years we have dealt with significant inflation, for materials, supplies and equipment,” Epperson said. “We are absorbing a significant increase in our property insurance rates and restoring the motor pool lease payment and keeping our compensation package competitive.”
