San Marcos Mercury | Local News from San Marcos and Hays County, Texas

September 25th, 2008
Kyle council passes tax increase, but signals possible priority change

By BILL PETERSON
Editor at Large

KYLE – The city council here approved a 10.24-cent increase in the property tax rate last week amid few reservations and slightly more perplexity.

The increase will raise the tax rate to 37.31 cents per $100 of taxable value from 27.07 cents previously. The action made official Kyle’s first tax rate increase after 11 consecutive years of rate cuts.

The budget to be supported by the tax increase passed unanimously. However, the tax rate passed only 6-1, with Councilmember Lucy Johnson dissenting.

The increases will help Kyle beef up its police department from 19 sworn personnel to 30 while enabling the city to add more than a dozen full-time equivalent employees. Both are goals of long standing enunciated by the city council.

However, citizens have elected two tax hawks in the last four months, significantly changing the city’s policy and taxation discussions almost in the middle of the budget process. David Wilson, who joined the council in May, and Lucy Johnson, elected in August, both pushed for cuts in the tax rate proposal, prompting concern that the long-term goals set by council in recent years might have to be reconsidered.

Among those goals are a new recreation center, a police station and a library, which could require the city to borrow up to $30 million and tax accordingly to cover future debt service. Already, just to keep city services up to date with population growth, City Manager Tom Mattis has forecast additional tax rate increases for the next three years, including rates of 44.12 cents in Fiscal Year 2010, 48.83 in FY 2011 and 49.93 in FY 2012 before coming back down to 46.42 in FY 2013.

Before the vote, Mattis responded to one budget inquiry from Wilson, who wanted to know how much the council could cut the tax rate by deferring five hires from Oct 1 to Jan. 1. Mattis reported that the city would save a hair less than $50,000, which would enable the city to shave 0.41 cents off the tax rate.

“My hope in the beginning was that I identified a full cent (to take off the tax rate),” Wilson said. “But after considering modifications in police pay (under new civil service rules) and the savings from staggering the hires, we didn’t get the savings I was looking for.”

The fact that the discussion occurred at all prompted Mayor Miguel Gonzalez to ask councilmembers to consider what they really want going forward. Gonzalez remarked that he was puzzled the city council would even consider delaying the hires of two police dispatchers in light of community and council concerns that the Kyle Police Department (KPD) is under-staffed.

“If we’re going to be talking about shaving one-tenth of a cent, then we need to go back and look at our capital plan,” Gonzalez said. “If keeping the tax rate down is going to be the priority, then we shouldn’t be looking at these other projects.”

Johnson pushed throughout the discussions of recent weeks to lower the tax rate and didn’t change her mind after learning that Wilson’s proposals would enable a minimal cut – even after Wilson conceded that the cut wasn’t worth pursuing.

“I can definitely see where some people will say $50,000 is insignificant,” Johnson said. “But the taxpayers may not, and if we can save a half-cent, it would be helpful.”

Councilmembers Michelle Lopez and David Salazar joined Gonzalez in their strong support for the budget and tax rate, saying the budget will pay for city necessities.

“For me, this is a basic budget,” Lopez said. “I am a taxpayer in this town. If I thought we were creating more things than we needed, then I would say, ‘Yes, I do not want to increase it.’ But I think all these things are beneficial.”

Said Salazar, “The last place I want to be is handing a budget over to the staff that does not allow them to meet the needs of the community.”

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