West U. To Hold Public Hearings On Possible Tax Rate
For the first time in two years, the City of West U. will hold public hearings on the tax rate due to the possibility of the rate being higher than the effective tax rate. City Council held a “record vote” Monday night on publishing highest possible rate of 36.14 cents per $100 in valuation in the public hearing notices as the possible tax rate for 2008. The vote passed 4-0 with Councilman Michael Talianchich absent.
The effective tax rate is the rate the city would have to assess to generate the same revenue as the previous year. The effective tax rate for 2008 is 34.05 cents. If a higher rate is adopted, it would be the first time in two years that a rate was adopted higher than the effective tax rate. Although 36.14 cents is lower than 2007’s rate of 36.6, most residents would pay more in taxes due to increased property values.
“I would estimate probably less than one percent of cities in the state of Texas that can adopt a tax rate lower than the effective tax rate, and we have been able to do that for two consecutive years,” said West U. City Manager Michael Ross, who said it is unlikely the city will be able to do the same this year without cutting services to residents.
Finance Director Walter Thomas says the rate in the notices for public hearings is just the highest estimated possibility to avoid having to republish the notices and hold more public hearings.
“Later if council decides on a lower rate things will be fine,” said Thomas. “If they decide on that rate things we will be fine…but if they decide on a rate higher than that we would have to republish again.”
The city has 60 days to set a tax rate and prepare a budget after receiving the certified tax role at Monday night’s meeting.
“This is to get the numbers we are going to put in the ads to put in the paper,” said Thomas. “The tax rate we are suggesting to them is because we are on a really short leash here. We have 60 days to adopt a budget and we have to have two public meeting a certain amount of time apart. If council says we think we are going to levy a tax rate of 35 cents then discover they needed it to be 36 cents then we would have to go through this again.”
Thomas estimates that adopting effective tax rate would result in a $140,000 loss in revenue for the city, due to several factors including increased healthcare and personnel costs.
Ross said it is too soon to tell if the rate will be higher than the effective tax rate.
“They (council) will have two public hearings to listen to residents speak on a proposed budget,” said Ross. “Right now it is too early to know what specific tax rate they would adopt.”