Folks, the below language is copied straight from the City Manager’s report to the Mayor and City Council in the Budget Presentation on the City’s webpage. Please review, then check my arithmetic at the end.
........"Finally, it will require the City to strategically prioritize between addressing unmet capital infrastructure needs (i.e. streets and alleys) versus providing enhanced or additional amenities (i.e. median improvements, parks, and facilities) versus reducing the tax rate, thus requiring a significant political discussion and consensus building within the community. This was true last year and remains true today.
THE GOOD NEWS!
Due to this growth, the FY2017 Proposed Budget includes a recommendation to lower the property tax rate by one cent, from $0.787173 to $0.777173 per $100 in assessed valuation.
As indicated previously, future reductions will need to be strategically weighed between capital infrastructure needs and enhanced or additional public amenities. Rowlett is fortunate that it is in the position to address the property tax rate at this time.
Why is this the right year to reduce the tax rate? Even with a 9.6% increase in assessed valuation, last year was not the right year to reduce the tax rate. We needed to reach the point where we can fund approximately $10.5 million annually for streets and alleys and we needed time to have some of the new development hit the tax rolls. However, FY2017 is a good place in our history to make the first cut in the tax rate. We expect to receive another 9.7% increase in assessed tax values “and” many of the projects that were about to start last year have now started and are going vertical. This is the right year to have this conversation!".........
There is an easier way to say all the above. Essentially, it asks the question, "Do we want it all now, or slow it down a little bit and don't hit the taxpayers so hard so quick?" I guess you have to give the taxpayers something, no matter how small. Key words in the City Manager's report to the council was "significant political discussion and consensus building within the community." Well, I guess I'm writing about "consensus building." It's kinda hard to build "consensus" with the following numbers.
Per the above, in 2016 the tax per dollar (as determined by the increase in real estate values) increased 9.6 cents per dollar. It is anticipated that 2017 values will increase by 9.7% , or 9.7 cents per dollar.
So……..2016…………….9.6 cents per $100
………...2017…………….9.7 cents per $100
Two year total……..19.3 cents per $100
But, the city is lowering the tax rate by $0.01 per $100 for 2017.
So……in two years, the city is receiving $0.183 per $100 in evaluation, and the taxpayer avoids another $0.01 in their tax bill in 2017 with a tax rate reduction of one cent. The City of Rowlett is receiving 18 times more of the new values than the taxpayer.
Now folks, I know the city has to replace some reserves. I’m not that thick headed. But, things seem to be a little lopsided. I don’t remember any time in my life that I got a 9.5% raise two years in a row. I don’t think I know anyone else that has, either.
Looking at it another way, If your house was worth $200,000 in 2015, your city tax rate would have been $0.787173 per $100, or a $1,574.35 tax bill for your house. In 2017, your house would have increased in value by:
2016…….$200,000 x 9.6%= $219,200.00
2017…….$219,200 x 9.7%= $240,462.4
But, the city is lowering the tax rate by only $0.01 per $100 of valuation. Therefore, the new rate of $0.777183 applied to the new evaluation of $240,462.40 would be a $1,868.80 tax bill. That is an increase of $294.45.
It’s pretty safe to say that if you owned a $200K house two years ago, your taxes over the past two years will have gone up about $300.00. Reducing the tax rate by one cent saves the tax payer about $24. This is just plain stingy, Folks, and a windfall for the city.
As for new revenue from newly developing properties, it all depends on how much tax abatement was given away. For example, The Villages, down by City Hall, has a 15 year tax abatement. They won't be contributing much for a while. In fact, the taxpayer will pay for additional fire and police protection for The Villages.
Brian Funderbunk, City Manager, is one of the best numbers men I know. I would prefer some straight and specific talk about what we're going to buy with an additional 18% tax raise rather than vague language that doesn't say much. I would like to hear a mid-range plan for the restoration of Rowlett's economic health for the next two years. I don't want a plan for the day to day activities. I don't need that. I want a plan that specifically sets out our use of funds derived from this new value. The new revenue is being generated because we're in a part of the country that's enjoying a very fast growing economy. I want to know how much we're going to collect over normal inflation, and how we're going to use it. I also want to know how much the new development will be contributing..........say everything after 2015. If we have given it all away from tax abatement grants, the taxpayer is going to continue to be nailed.
There is no doubt in my mind that if the tax rate was doubled, someone would figure out how to spend it all.
Brian Funderbunk, City Manager, is a good guy. You need to tell him and City Council how you feel. Now, you gotta be fair. We need financial stability to keep our excellent bond rating.