HARLINGEN — Taxing decisions are heating up at City Hall.
During a public hearing Wednesday, City Commissioner Frank Morales is planning to stand behind a citizens’ group calling on commissioners to lower the tax rate as they consider passing a $54.3 million general fund budget.
At City Hall, officials are planning to set a so-called voter-approval tax rate of 60 cents per $100 valuation, more than 1 cent lower than the current rate of 61 cents.
As a result of increasing appraised property values and new construction, the proposed rate is projected to generate $1.03 million, Robert Rodriguez, the city’s finance director, said Tuesday.
Meanwhile, the citizens group wants commissioners to set the no-new-revenue tax rate of $59 cents per $100 valuation, which they argue would lessen taxpayers’ burden.
“Obviously, we listen to what the taxpayers brought up,” Morales said Tuesday. “They have a point.”
Standing by residents’ opposition
During a public hearing earlier this month, about 50 residents called on commissioners to lower taxes, pushing for the no-new-revenue tax rate, Robert Leftwich, a former city commissioner sitting on the city’s Economic Development Corporation board, said during an interview.
When the tax rate went to a vote during a commissioners’ meeting, Morales cast the dissenting vote.
On Tuesday, he called for a “balance” between the voter-approval rate and the no-new-revenue rate.
“We must find a balance between what we spend and our taxpayers,” he said. “We have to be mindful of our small business owners and fixed-income taxpayers. (Taxes) keep going up — they’re still getting hurt. If we can’t tighten our belts and find ways to reduce how much we spend, we’re not being good stewards for our taxpayers.”
But Morales said the city needed tax revenue to fund services.
“If we can get close to the no-new-revenue rate — inflation is going up, prices are going up,” he said.
Supporting voter-approval tax rate
Meanwhile, Commissioner Michael Mezmar said commissioners are planning to drop taxes for the third straight year.
“We have higher sales tax and more property being built,” he said. “It’s because of that we were able to lower taxes three years in a row.”
Meanwhile, Mezmar stood behind setting the voter-approval tax rate.
The no-new-revenue tax rate would not generate money the city needs to fund services, he said, adding, “so nobody gets a pay raise and we can’t buy equipment, we can’t afford the higher cost of electricity, we can’t afford to provide any drainage and we can’t afford the new, more expensive medical insurance.”
Public notice
Wednesday’s public hearing comes after officials posted a notice stating their proposal to set the voter-approval tax rate.
”The no-new-revenue tax rate is the tax rate for the 2022 tax year that will raise the same amount of property tax revenue for the city of Harlingen from the same properties in both the 2021 tax year and the 2022 tax year,” the notice posted on the city’s website states. “The voter-approval rate is the highest tax rate that the city of Harlingen may adopt without holding an election to seek voter approval of the rate. The proposed tax rate is greater than the no-new-revenue tax rate. This means that the city of Harlingen is proposing to increase property taxes for the 2022 tax year. The proposed tax rate is not greater than the voter-approval tax rate. As a result, the city of Harlingen is not required to hold an election at which voters may accept or reject the proposed tax rate.”
The numbers
This year, the Cameron County Appraisal District’s annual re-appraisals boosted the city’s property values to $3.97 billion, from $3.71 billion last year, Rodriguez said
Meanwhile, the city’s voter-approval tax rate is projected to generate $1.03 million in revenue, he said.
Of that total, new construction is expected help generate $361,221, he said.
This year, the voter-approval tax rate is projected to generate about $400,000 more than the no-new-revenue rate, Kareem Abdullah, the city’s deputy finance director, said.
“Even if we went with the no-new-revenue tax rate, we’ll still typically have increased revenues due to new additions and new construction,” he said.
Under this year’s voter-approval tax rate, most taxpayers are expected to pay about the same amount of taxes as they paid last year, he said.
The appraisal district’s higher appraised values are expected to help generate much of the city’s projected revenue, he said.
“There’s the tax rate and there’s the appraised value,” Abdullah said. “The only thing we can control is the tax rate, which is down this year. Most people are going to pay about the same in taxes. What that doesn’t factor in are any new additions. If they did an addition to their home, their taxes are going to go up. If you increase the value of your home by a lot, it’s still going to increase the amount of taxes you pay.”
This year, Cameron County commissioners’ decision to boost the county’s tax rate by 2 cents is also driving tax revenue, he said.
