The City of Hutto is proposing three tax increase options as a result of SB-2 that limits how much taxes can go up. Currently the rate is 51 cents per hundred dollars of valuation. One option is raise to 61.5 cents which would cover debt service but not maintenance and operation. Another is 64 cents which would buy more staff for the new justice center and a third is 68 cents which would get Hutto everything it needs for staff and vehicles.
Here:s the city’s offical statement:
As a result of the passage of Senate Bill 2 during the 86th Session of the Texas Legislature as well as the passage of the November 2018 bonds, the City of Hutto is facing some impactful decisions about its tax rate as it prepares the 2019-2020 budget.
SB2, which caps the amount a city can increase its tax rate without voter approval, puts cities in the position of having to reconsider their base Maintenance and Operations rate to be prepared for future years when base tax rates will fall under the new law.
“With this new limitation, we must revise our tax rate appropriately to provide the necessary funding for services like public safety, public works and upgrades to infrastructure needed to keep up with the growth we are experiencing and expecting,” City of Hutto Mayor Doug Gaul said.
Currently, the City has adopted a M&O rate below the rollback rate, or maximum rate allowed without voter approval, but will consider different options in its upcoming budget cycle.
“It is the smart and financially responsible thing to do,” said Michel Sorrell, City of Hutto Assistant City Manager and CFO said. “We are one of the fastest growing cities in the state and that growth comes with a cost.”
Sorrell will present three tax rate options to Hutto City Council:
- Option 1 would move the tax rate from 51 cents to 61.5 per $100 valuation as was approved by voters in the November 2018 Bond Election. With this option debt service on voter-approved bond projects would be included, but no additional M&O funds would be available to cover costs associated with the increase in services;
- Option 2 would set the tax rate at 64 cents per $100 valuation, which would service debt related to the November 2018 Bond Election and provide funding for additional staff to operate the new Justice Center that was also approved in the Bond Election;
- Option 3, the city’s current rollback rate of 68 cents per $100 valuation, would fund debt incurred from the November 2018 Bond Election and all necessary staff requests and related vehicles and equipment needed with the added services as well as ensure the city maximizes its base tax revenue ahead of the new state legislation.
The November 2018 Bond Election included improvements to infrastructure, including roads, water utilities and mobility, public safety, including police staff and judicial facilities, and parks, including improvements and expansion of current amenities.
“Voters supported a tax increase with the November 2018 Bond Election projects which will improve our streets and drainage, parks and public safety,” Gaul said. “We want to deliver these projects in the most cost-effective and responsible way possible while ensuring the long-term financial health of our city.”
City Council will hold public hearings on the new tax rate Aug. 1 and Aug. 15 and set the new tax rate and adopt its budget at its regular scheduled September meeting.
(Photo:Shutterstock/enciktepstudio)
