McALLEN — McAllen homeowners might see some relief next fiscal year as the city is proposing a property tax decrease.
As budget talks got underway on Tuesday, City Manager Roel “Roy” Rodriguez told the city commissioners they were proposing to lower the property tax rate from the current $0.495600 per $100 of valuation to $0.479900 per $100 of valuation.
“With the proposed rate of 0.4799 versus our current rate of 0.4956, we basically are matching (the) 2018-2019 tax rate,” Rodriguez said, noting that they had a bond issuance that year which prompted their rate to increase.
The 2018 bonds, which were approved by voters, were for $22 million in drainage improvements and $3 million for traffic control improvements.
“We’re almost back to where we were before the bond issuance, so we’re basically giving it all back,” he said.
Rodriguez then told the commissioners that the city could go even further down to a rate of 0.4762 which the city last had in 2014.
“To do that, to go from the 0.4799 to 0.4762, it’ll cost us about $395,000,” Rodriguez said.
City Commissioner Joaquin “J.J.” Zamora asked about the sustainability of lowering the rate, wondering whether it would just be for one year or if they could maintain it long term.
But Rodriguez assured that if property values keep going up, the city could again reduce taxes in the future.
Zamora then said he would prefer to only go down to the recommended rate of 0.4799 to offer some stability to residents that they can depend on for three or even five years.
“The way things are going right now, commissioner, there’s no reason for us to believe we’re going to need a property tax increase,” Rodriguez replied. “Unless you have a bond election.”
Rodriguez acknowledged that among the reasons it would be favorable for the city to lower the tax rate is that to keep the same tax rate that they adopted last year, the $0.495600 per $100 of valuation, the city would have to hold an election.
“For total transparency here, if you adopt a tax rate of over 0.4869, you have to go to the voters to approve it,” Rodriguez said. “We’re recommending 0.4799. So even then, we’re going 70 basis points down, below that threshold.”
In a news release issued the day after the budget workshop, the city emphasized the savings that the lower tax rate would provide residents if approved.
“This decrease in the McAllen property tax rate is important for our taxpayers because it will provide relief during this unprecedented time,” Rodriguez stated in the release. “This further emphasizes to our taxpayers that we are always looking out for them.”
Mayor Javier Villalobos expressed support for the lower rate and praised the city staff for their work.
“I was confident that the City of McAllen management team would put a solid plan together, that would not only prioritize public safety and capital improvement projects, and advance quality of life and economic investment, but also would include a lowered property tax rate, providing relief for taxpayers,” Villalobos stated.
The city will hold a public hearing on the proposed rate on Sept. 12 at 5 p.m. The public may participate by attending the hearing at city hall or online via Zoom.
