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September 9th, 2010
Kyle council cuts tax rate, debt

STAFF REPORT

KYLE — The Kyle City Council, the majority of which won election this year in a climate hostile to the city’s rising taxes, passed a budget with a tax decrease this week.

In a 5-2 vote, the city council approved a budget calling for a property tax rate of 41.54 cents per $100 of taxable value in the fiscal year (FY) 2011 budget, down from the 42.4-cent rate on the present budget.

During the previous two budget cycles, the city had raised the property tax rate from 27.07 cents to 42.4 cents and city officials were predicting that the rate could go as high as 70 cents within the next few years.

However, the city has backed off from plans to ask voters to approve $20 million in debt for a recreation center. The council also abandoned plans for a city-funded industrial park, using about $2 million that had been borrowed in 2008 to pay down some of the city’s $73 million in debt.

“Late last week, I worked closely with (interim city manager) James Earp and city staff to come up with a plan to use these funds to pay down our debt responsibly and efficiently,” Kyle Mayor Lucy Johnson said. “I feel we created something that benefits the taxpayers both this year and into the future.”

By state law, the council is required to approve a budget by the third Thursday in September. Tuesday night’s meeting was the last regularly scheduled council meeting before that date. Johnson said Earp and the city staff worked through the Labor Day weekend to have the numbers ready for the council Tuesday night.

About $300,000 of the $2 million in bond funds will go towards paying all the infrastructure cost of the new library. The remaining $1.7 million will be used during a period of four years to help make interest and principle payments on outstanding bonds.

This measure dropped the debt portion of total property tax rate, and allowed the council to increase funding for maintenance and operations. The council added a 1.5 percent COLA for city employees and decreased the total transfer needed from the city’s utility fund to cover operating costs.

“It was very important to me that we avoid cutting city services at this time, and I was willing to face a tax increase if necessary in order to do that,” Johnson said. “Knowing that this year we were able to decrease taxes while keeping all our services intact is about as close to having your cake and eating it too as I think we’ll ever get.”

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0 thoughts on “Kyle council cuts tax rate, debt

  1. Kyle, Tx. Mayor and City Council are looking to get a pay raise and Council discussions on new City Manager are held in executive session. I have not seen anything reported in the media and no attachements on the agenda.

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