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HARLINGEN — The city’s tax rate might be dropping even more than 6 cents this year.
Earlier this week, city commissioners held off on setting a proposed property tax rate of about 54 cents per $100 valuation to go with a proposed $57.8 million general fund budget.
Now, commissioners are considering dropping the proposed 54-cent rate, equal to the so-called voter-approved tax rate coming with a state-mandated 3.5% cap on revenue collection, from about 0.008 cents to 1 cent per $100 valuation.
Based on the city’s tax rate, 1 cent generates about $470,000, Kareem Abdullah, the city’s deputy finance director, said in an interview.
Cutting deeper
During a meeting, City Manager Gabriel Gonzalez said officials were considering dropping the proposed 54-cent tax rate by about 0.008 cents per $100 valuation.
“I asked to see what the budget would look like if we reduced it,” Mayor Norma Sepulveda said during the Aug. 16 meeting, referring to the proposed tax rate. “We could potentially reduce it.”
Amid discussion, Commissioner Frank Morales called on commissioners to consider cutting the proposed tax rate by as much as 1 cent.
“We can look at that at the next meeting,” Sepulveda told Morales.
Commissioners are planning to set the proposed tax rate during an Aug. 22 meeting.
“I want to make sure we look at the budget and tax rate at the exact same time so we’ll know exactly what we need when we come to a decision on this,” Commissioner Daniel Lopez told commissioners.
Choosing between options
Last week, Gonzalez proposed cutting about 6 cents off the city’s property tax rate of 61 cents per $100 valuation, a move what would set the new tax rate at about 54 cents per $100 valuation, equal to the voter-approved tax rate.
As they consider setting the new tax rate, commissioners have the option of adopting the voter-approved tax rate, which caps the amount of revenue the city could collect in property tax revenue at the state-mandated level of 3.5%, or the so-called no-new-revenue tax rate.
Under the voter-approved tax rate, the city would collect about $21.6 million in revenue, while the no-new-revenue tax rate would generate $20.4 million, Abdullah said in an earlier interview.
If commissioners pass the voter-approved tax rate, the city would collect about $1.2 million in property tax revenue, he said.
Appraisal district’s steep re-appraised property values
This year, the Cameron County Appraisal District increased the area’s appraised property values to their sharpest levels in the area’s history, leading many property owners to brace for tax hikes.
Across the city, the appraisal district’s new re-appraisals spurred the city’s total appraised property values to soar to $4.7 billion, up from $3.9 billion last year, leading to a total $780 million increase, with new construction accounting for $55.1 million of the hike, Abdullah said in an earlier interview.
