City Council approves Six Cents tax increase for 2015-2016 Fiscal Year
By: Jose G. Landa, Eagle Pass Business Journal, Inc., Copyright 2015
The City of Eagle Pass City Council on a split vote approved a six cents per $100 valuation ad valorem property tax increase for the City’s 2015-2016 Fiscal Year at their regular meeting held on Tuesday August 4, 2015, approving the first reading of an Ordinance establishing the tax rate and increase by six cents for 2015-2016 fiscal year budget.
Under Agenda Item No. 7, consideration and possible approval of an Ordinance levying a tax rate for the City of Eagle Pass for the tax year 2015, Eagle Pass City Manager Gloria Barrientos presented the City Council the 2015-2016 proposed tax rate and increase.
Barrientos stated that the tax rate will be broken down at $0.368052 per $100 valuation for payment of maintenance and operations and another $0.205228/100 for payment of principal and interest on outstanding debt of the City for a combined rate of $0.573280 per $100 valuation of appraised real property by the Maverick County Appraisal District.
This is in addition to the recently increased real property appraisals done by the Maverick County Appraisal District which includes some increases of one’s real estate appraisals as high as 26 to 29 percent from the previous year, thus imposing a double tax increase on City of Eagle Pass taxpayers.
The Maverick County Appraisal District was forced to increase residential and commercial property values for 2015-2016 in order to offset a decrease of $100 Million of the Mineral Property appraisals in Maverick County for 2015-2016. In other words, Eagle Pass and Maverick County taxpayers are having to foot the loss of the $100 Million in Mineral Property appraised values from the Maverick County Appraisal District Certified Tax Roll for 2015-2016 by having their residential and commercial property appraisals increased by 26 to 29 percent than the previous year.
“This is an increase of about six (6) cents and this includes the roll back rate which is the recommendation,” said City Manager Gloria Barrientos to the City Council.
Barrientos stated that this year’s tax rate is scheduled to raise more funds for maintenance and operations than last year’s tax rate. “The tax rate will be effectively raised by 8%,” added Barrientos.
City Council and Administration discussed the comparison between last year’s 2014 tax rate and this year’s proposed 2015 tax rate.
Eagle Pass Finance Director San Juana Garza and City Manager Gloria Barrientos presented a breakdown of what the proposed tax rate would include and how the new tax rate had been determined, which took into consideration the $10 Million in Certificates of Obligation that were recently approved and issued by the City of Eagle Pass for certain improvements of infrastructure and buildings of the City of Eagle Pass.
Councilwoman Gloria E. Hernandez asked City Manager Barrientos if there was a reason why she was recommending an 8% increase in total taxes.
“Normally, the municipalities are allowed to go up to the rollback rate which is 8%. So it’s recommended that we follow that because it allows us to,” replied Barrientos. Barrientos’ answer implied that because state law allows a tax entity such as the City of Eagle Pass to raise taxes up to 8% without facing a voters referendum election on increased taxes, that it is the City of Eagle Pass’ Administration strategy to increase the tax rate up to the maximum rate allowed by law (8%) each year without having to face a rollback election by taxpayers.
“I know we’re allowed to raise taxes. But my question is under the budget did you not try to stay within what we would get through our current tax rate? Why are we raising taxes?” asked Councilwoman Hernandez of City Manager Barrientos.
“In order to be able to pay for the services that we must provide,” replied Barrientos.
“Also, because, of the last borrowing that we did. We have to collect additional taxes for the interest and principal payments of the bonds,” replied City Finance Director San Juana Garza.
Garza presented to City Council with a spreadsheet with all the bonds and certificates of obligations of the City of Eagle Pass detailing the amount of principal and interest payments owed by the City.
Barrientos pointed out that through maintenance and operation, the City of Eagle Pass is allowed to set an 8% increase and that it would be an increase of about $0.1 cent per $100 valuation.
“The one that is going up by about $0.5 cents is the interest and sinking that is appropriated for the debt and that one is controlled by the amount of debt that the City incurs. We have to raise it up by that amount, to pay our debt,” added Barrientos.
“It seems to me that we’re going the full extent of what we’re allowed and when we’re allowed something, it doesn’t mean we have to do it,” noted Councilwoman Hernandez.
“I am just asking is there any way that we can work with a lower rate?,” asked Councilwoman Hernandez to Barrientos.
Barrientos noted that when the information was initially presented at the first City Budget Workshop there had not been any of the estimated increases in taxes included and the numbers were reflecting a deficit.
“In order to try to assist in balancing the budget, that is why we’re making this recommendation,” said Barrientos.
City Council and administration proceeded to discuss certain figures that had been presented in the budget setting process in order to try to ascertain a clearer picture of what was being recommended by administration.
Eagle Pass Mayor Ramsey English Cantu stated that there were certain issues that were being raised and that administration needed to look into those concerns such as the recommended increase to the maintenance and operations portion of the proposed tax rate and to justify a need for such increase.
“And if we can assure that it is truly needed without us going to the full extent of the law on that portion of the tax,” said Mayor Cantu.
Barrientos concurred and stated that the information would be presented at the following (second) reading of the 2015 tax rate ordinance and workshop of the budget setting process.
After discussion the Eagle Pass City Council approved agenda item No.7 on a split vote as City Councilwoman Gloria E. Hernandez abstained from voting on the ordinance to set a 2015 tax rate for the City of Eagle Pass which the City regularly increases the tax rate by the maximum 8% allowed by state law without requiring a tax rollback election by taxpayers.
This was the first reading of the proposed 2015 tax rate and must be read another two times and hold a public hearing that allows the public and taxpayers to comment on the proposed 2015 tax rate, before finalizing the new proposed 2015 tax rate with a third and final reading and vote.
This first reading does not officially approve the proposed 2015 tax rate increase of 8% for next year until a third reading and approval is done by City Council. Unless any Eagle Pass taxpayers present themselves at the second and third readings of the proposed 2015 tax rate with the 8% tax increase to protest and object to this tax rate increase, it will get approved by City Council.
Remember that in addition to this 8% tax rate increase proposed by City Council and Administration, the Maverick County Appraisal District has also increased residential and commercial property appraisals by up to 26 to 29 percent while allowing a $100 Million appraisal decrease for Mineral Properties (Oil & Gas properties). In essence, the Eagle Pass taxpayer is going to have his or her taxes increased twice, one by the City tax increase and a second time by the Maverick County Appraisal District increased appraisals for 2015-2016 while the Oil and Gas Mineral Property owners are having their taxes reduced due to the $100 Million decrease in their appraisal values approved by the Maverick County Appraisal District Board of Directors under the leadership of School Board President Lupita Fuentes.
