As the Greenville city manager and city staff develop a draft of the 2019-20 city budget, they plan to consider two requests in regard to local property taxes, both of which have been made in recent months by multiple city council members and Greenville residents.
Those recommendations are keeping the property tax rate below the effective rate and freezing the property tax amount for residents aged 65 and older or who are disabled.
Back in September 2018, the council cut the city tax rate by more than 3.5 cents, from 68.9 cents per $100 valuation to 65.2 cents for every $100 that a property is worth.
The current city tax rate is also half a cent lower than the effective tax rate of 65.7 cents per $100 valuation. It was the first time in 30 years that Greenville’s city tax rate was set below the effective rate.
Since then, Greenville City Councilman Brent Money and former Councilman James Evans, in particular, have encouraged the council to avoid setting the city’s property tax rate above the effective rate in future budgets.
On Tuesday, Evans, with a flare for the dramatic, attended the Greenville City Council meeting dressed in black, as he spoke about the tax rate during the citizens to be heard portion of the meeting.
“I want to explain why I’m wearing black tonight,” Evans began. “Johnny Cash wore black for the poor and the beaten down. I’m doing it for the poor and beaten down who are facing ever increasing property taxes in Greenville, Texas."
Using Round Rock, Texas and its reported 15 percent growth since 2010 as an example, Evans then went on to speak in favor of a pay as you go philosophy in building infrastructure and charging higher impact fees for new development projects to “fill the coffers,” and read the following quote from Round Rock’s director of utilities and environmental services, Michael Thane, which appeared in Municipal Sewer & Water magazine.
“The pay-as-you-go philosophy means we try to build up our fund balance — in other words, our savings account — and then we utilize this money to go build infrastructure without having to issue debt,” Thane says.
The main vehicle for ensuring that the city coffers can bear the burden of any given project is a hefty impact fee for any new development.
“We don’t want the people who are living here to have to pay for the cost of expanding our treatment plants,” Thane says. “The plants are expanding because of a new developments, not because of the people who have been living here 30 years.”
In recent months, Evans, and now Councilman Al Atkins – who serves in the Place 2 spot on the council since Evans was term limited – have also both recommended that Greenville City Manager Summer Spurlock look into the prospect of freezing the city tax amount for residents aged 65 and older.
At a public hearing on May 21, as residents spoke for or against the city entering an economic development agreement with the Stainback Organization (which the council approved), resident Carrie May expressed her concern for the tax burden on the elderly in the community.
“I’m talking about the people who are at a fixed income, who are never gonna get another raise,” May said. “They’re counting on you as elected officials to take care of them, to make sure their taxes don’t go up so they don’t have a situation where they can’t get their roof fixed because they just got hail damage … They can’t afford more taxes.”
When City Manager Spurlock addressed the prospect of a freeze on the property tax amount for Greenville’s seniors, she emphasized that there are still “many unknowns at this point” as she and city staff plan next year’s city budget, especially in view of Texas Senate Bill 2/House Bill 3, which was signed by Governor Greg Abbott Wednesday.
The Texas Property Tax Reform and Transparency Act, as it is called, will require taxing units in the State of Texas to call an election before levying a tax that would result in a 3.5 percent increase in property tax revenue compared to the previous year.
Spurlock also noted that budget planning conversations would initially focus on the budgetary goals and objectives approved by the council adopted at their May 28 meeting. Those goals and objectives covered several improvements to local infrastructure, public safety, future growth planning, and quality of life projects, which can be viewed at bit.ly/2wV7uLq, in the minutes from that meeting
In regard to the impact that such a freeze could have on tax revenue, Spurlock used data from the Greenville Independent School District, which already offers the exemption.
“Currently, there are 1,715 property owners that take advantage of the tax freeze for GISD … and they pay the amount of taxes that they paid the year they completed the application,” Spurlock explained. “So, if they take advantage of it right when they turn 65, then that’s the amount that they pay.
“So, if someone pays $300 for their taxes this year, next year, when the tax rate went up or their appraisals went up – whatever happened – then the next year, they’re still only going to pay $300, so that’s the way it works in simple terms.
“Now, if they didn’t apply until they were 68, then whatever the tax amount was when they were 68 will be where their tax amount will be frozen,” Spurlock continued. “It doesn’t work retroactively back to the amount they paid when they were 65.”
“With the current tax rate that we have now and the appraisals that Brent South (at the Hunt County Appraisal District) has at this current time, which could change … it would lower our revenue by $127,549, that is if we kept the same tax rate, and the appraisals (hypothetically) stayed the same,” Spurlock projected.
On Wednesday, June 19, Spurlock and representatives from other taxing entities in the county will attend a workshop about Senate Bill 2 and its anticipated impact. The workshop will be conducted by the Hunt County Appraisal District.
The first draft of Greenville’s city budget for 2019-20 is to be presented at the Aug. 13 city council meeting.