By Matt Ward —
City property tax rates could increase for the first time since 2012 as the Fredericksburg City Council proposed a rate of $0.2513 per $100 valuation during their regular meeting Monday.
Currently, city taxes are collected at a rate of $0.2482 per $100 valuation, though the effective tax rate for the 2015-2016 fiscal year calculated by the Gillespie Central Appraisal District is two cents lower than the proposed rate at $0.2313.
The appraisal district has taken over property tax collection this year, following issues at the Gillespie County Tax Assessor/Collector’s office.
Tax rate debate
Councilman Graham Pearson spoke out in opposition of a tax rate increase, serving as the lone dissenter of the proposal, which passed 4-1.
“We have a cash reserves policy which is six months of revenues (for the general fund) and we’re not only meeting that, we have at least $900,000 more than that,” Pearson said. “I don’t think we need the extra revenues.”
A two-cent increase over the effective tax rate would bring in around $325,000 in additional revenue to the city’s budget.
The tax rate proposal is not set in stone, however, as the council will continue to debate reducing the rate at a budget workshop at 4 p.m., tomorrow at City Hall as well as 6 p.m. public hearings Aug. 26 and Sept. 2 at the Gillespie County Law Enforcement Center.
City Manager Kent Myers said that two key items that will free up room for additional spending had not been added to the budget as of Monday night.
City staff will be increasing sales tax revenue projections by $100,000-$150,000 as Fredericksburg continues to generate sales taxes above the prior year.
“Our sales tax is looking really good,” Myers said. “Staff feels very comfortable making that (revenue increase) recommendation.”
Additionally, the city will benefit from $195,000 in savings from this year’s street paving project due to the reduced cost of asphalt.
The majority of the council expressed support for keeping the option of a tax rate higher than the effective rate of $0.2313 available.
“Hopefully we can work on that (tax rate) and get it down a whole lot closer,” Councilman Gary Neffendorf said. “We can’t go up after tonight but we can go down from the high end.”
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