HARLINGEN — Amid some opposition, Mayor Norma Sepulveda is strongly standing behind the city commission’s decision to set a tax rate projected to help generate more than $1 million in revenue.
Last week, commissioners set a so-called voter-approval tax rate of 60 cents per $100 valuation, cutting more than a cent off the current rate of 61 cents as part of the passage of a $54.3 million general fund budget for the upcoming fiscal year.
Commissioner Frank Morales cast the dissenting vote.
“I want the city of Harlingen to know that we are being responsible and being good stewards of their tax dollars,” Sepulveda stated.
“I recognize the stress inflation has caused our community, which is why the commission did not even entertain the thought of raising the tax rate and instead committed to lowering the tax rate,” she stated, noting for every $100,000 in taxable value assessed to a home, homeowners pay the city $600 in taxes.
The decision to trim more than a cent off the tax rate is projected to lead to a loss of about $500,000 in revenue, she stated.
Factoring appraised property value increases
For the third year in a row, commissioners have cut the tax rate, officials stated in a press release.
However, the Cameron County Appraisal District’s new property re-appraisals mean other homeowners might see their taxes go up.
This year, the appraisal district’s annual re-appraisals boosted the city’s property values to $3.97 billion, from $3.71 billion last year, Robert Rodriguez, the city’s finance director, said.
As a result of increasing appraised property values and new construction, the new tax rate is projected to generate $1.03 million, he said.
Some paying less in taxes, some paying more
As a result of the tax cut, some homeowners are going to be paying less taxes, Sepulveda stated.
“This lowering of the tax rate equals about a $500K loss in tax revenue for the city,” she stated. “However, there will still be an increase of revenue collected due to new construction and increased values assessed by the appraisal district.”
During the upcoming fiscal year, new construction is projected to help generate $361,221, Rodriguez said.
“While some homeowners will see their tax bill go down, others will see a slight increase,” Sepulveda stated. “To put this into perspective, the average homestead value in 2021 was $98,335 compared to $106,472 in 2022. So despite lowering the tax rate, some residents may see an increase in their city taxes. That increase on average will be a total of $36.”
Addressing opposition
In her statement, Sepulveda pointed to a group of residents’ opposition to the commission’s decision to set the voter-approval tax rate instead of the so-called no-new-revenue rate.
“During a public hearing on the proposed tax rate, 14 residents addressed the commission requesting the city adopt the no-new-revenue tax rate,” she stated. “I believe there may be some confusion as to what this really means in terms of a resident’s actual tax bill. The adopted tax rate is 60 cents — the no-new-revenue tax rate was 59 cents.”
During an interview, Rodriguez said setting the no-new-revenue tax rate would have led the city to lose about $400,000 in revenue.
“Adopting the no-new-revenue tax rate would equate to a $400K loss to the city while saving the taxpayer on average a total of $11,” Sepulveda stated. “The no-new-revenue tax rate does not account for the rising costs incurred by the city for health care, electricity and other uncontrollable expenses — which is why most, if not all, cities in the RGV abstained from adopting the no-new-revenue tax rate. Additionally, Harlingen’s tax rate is lower than Brownsville, Edinburg, Pharr, Weslaco, San Juan, San Benito, Donna, Mercedes and many other cities across the RGV.”
Morales calls for ‘balance’
Meanwhile, Morales called for a “balance” between the voter-approval rate and the no-new-revenue rate.
Commissioners, he said, could have set a lower tax rate to help lessen the burden on taxpayers.
However, Rodriguez said officials decided to set the new tax rate to help fund operations amid inflation’s rising costs.
“We chose the tax rate we chose because of the budget restraints — we’ve got inflation,” he said. “We’re trying to align the tax rate with the goals and objectives of the budget the commission set.”
‘Very lean budget’
In a press release, Sepulveda described the new budget as “a very lean budget with no wasteful spending.”
“It includes the necessary funding to maintain acceptable levels of service in all areas as directed by the commission that focuses on public safety, drainage and infrastructure and quality of life issues,” she stated. “Half of the revenue collected will go towards police and fire. We are also doing our best to ensure that city employees are paid a livable wage.”
The new budget includes the purchase of five police vehicles; fire department extrication tools or hazmat detectors; new code compliance and building inspectors’ vehicles; more than $6 million to fund drainage projects; a new vactor truck for the public works; $450,000 for projected electricity cost increases; and $1.5 million for street improvements while also funding the salaries of nine new employees, the press release stated.
