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HARLINGEN — After weeks of talks, commissioners are cutting 6 cents off the city’s tax rate amid the Cameron County Appraisal District’s steepest spikes in city property’s re-appraised taxable values.
After considering slashing the city’s 61-cent property tax rate by as much as 7 cents, commissioners are planning to set the so-called voter-approved tax rate of about 54 cents per $100 valuation, capping revenue collection at the state-mandated 3.5% level.
“It’s the lowest tax rate that the city’s had in the last 20 years,” City Manager Gabriel Gonzalez said in an interview.
As part of a proposed $57.8 million general fund budget coming with a $31 million fund balance, commissioners agreed to set aside $1.3 million to fund City Hall salary increases, police pay hikes stemming from a collective bargaining agreement, a work crew charged with making drainage upgrades along with other top priorities.
Meanwhile, the 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.
Setting voter-approved tax rate
During a meeting, commissioners voted 4-1 to set the voter-approved tax rate at about 54 cents per $100 valuation, with commissioner Frank Morales casting the dissenting vote after proposing cutting an additional 1 cent off the tax rate.
Under the voter-approved tax rate, the city will take in about $1.2 million in property tax revenue.
In reviewing options, commissioners had the choice of cutting 0.0086 cents or 1 cent off the tax rate, or adopting the so-called no-new-revenue tax rate of about 51 cents per $100 valuation.
Based on the city’s tax rate, 1 cent generates about $470,000.
While the voter-approved tax rate would generate about $21.6 million in revenue, the no-new-revenue tax rate would raise about $20.4 million.
During discussion, Mayor Norma Sepulveda told Morales officials couldn’t fund their priorities without setting the tax rate at the voter-approved level.
“Like you, I wanted to see if it was possible to do 1 cent, and if it was, then I would have recommended to the commission to adopt it,” she said during the Aug. 22 meeting. “But having seen the numbers and seeing we can’t do that and fund everything that we want, it looks like we’re going to (be) adopting the voter-approved rate.”
Funding priorities
This year, commissioners priorities include earmarking $478,000 during a two-year period to increase 129 City Hall employees’ salaries, boosting them closer to market wages, based on a consultants’ study.
Meanwhile, they’re tapping $277,436 to give employees 2% across-the-board pay hikes.
Stemming from a collective bargaining agreement, commissioners are setting aside $503,124 during the next three years to help fund a $1.3 million increase in police officers’ pay, while earmarking $493,838 to help fund the fire department.
To cover United Health Care’s 5% increase in employee health insurance costs, they’re paying $205,707.
With drainage upgrades cited as a top priority, officials are forming a work crew, setting aside $193,000 to cover wages along with $608,349 t0 fund equipment purchases including a $365,000 excavator, a lowboy semi-trailer, a backhoe and a front-end loader.
To better process city documents, officials are tapping $139,284 to fund an internal document scanning and retention system.
In the city’s code enforcement department, they’re hiring a code enforcement officer at a salary of $48,103 along with a vehicle priced at $43,150.
This year, commissioners are also planning a $1.8 million street paving project.
