Galveston’s 2018 city budget will benefit from a $3.4 million increase in property taxes, city officials said.
The city’s property tax roll increased by 6 percent from 2016 to 2017, bringing the net taxable value to $6.2 billion from $5.8 billion.
Of the property tax revenues — which amounts to a spike of 11.96 percent — $407,200 is from new property added to the tax roll. Increases in appraised value of developed property added $945,100, city officials said.
The city in 2017 collected $28.7 million in property taxes to be used for city services. In 2018, that number is estimated to be $32.1 million, according to city documents.
“The city has been fortunate in the last few fiscal years to benefit from a stable, growing economy,” City Manager Brian Maxwell wrote in an Aug. 10 letter to Mayor Jim Yarbrough.
The largest increase wasn’t a surprise, Maxwell said. More than $2 million in property taxes came from a 3.5 cent property tax increase for street and drainage bond projects.
Those projects are a hallmark effort for the city administration, which proposed $62 million in street and drainage improvements that voters approved in a May referendum. Those efforts are already underway and are expected to be complete by 2022.
Without transfers from other city funds, the city will bring in $118.2 million in revenue, according to city documents.
Galveston has been lucky to have its tax base values increase as they have, but the city needs to plan for events that could bring property values down, Mayor Jim Yarbrough said at a Thursday City Council workshop.
“We get another Ike, or we get more than just a little blip. What does our budget look like in the aftermath?” Yarbrough said. “I just don’t want to get caught flat-footed.”
The city projects to spend $145.4 million next fiscal year, which is slightly more than the $143 million the city planned for in 2017.
The largest increase comes from personnel costs, according to the city. Galveston will spend $62.5 million on personnel, which is $6 million more than it paid in 2017.
The police and fire departments will see larger increases, with $1 million going toward collective bargaining agreements approved in 2016. The police will get a 4.87 percent increase, and fire will have a 4.3 percent increase.
The city plans on budgeting $1.2 million to hire 10 additional police officers, Maxwell said. Six more ride on receiving a federal grant.
The amount of money for personnel might seem high but is worth the cost, Assistant City Manager of Finance Mike Loftin said.
“Employees are a very important, if not the most important priority to us,” Loftin said.
The budget won’t be approved until Sept. 28. The city will hold a public hearing on Aug. 24 on tax rate, and it will hold a second public hearing on Sept. 14 on the tax rate and the budget.
The budget is also subject to fluctuation during the year, Maxwell said.
“This isn’t a set-it-and-forget-it document,” he said. “By the end of the year, it’s a perfect science. It is a living document.”