The city of Galveston’s budget for the 2019 fiscal year includes more than $86 million in capital improvements, a 14.5 percent increase from the previous year as officials plan major drainage and infrastructure projects.

The capital budget makes up the biggest reason for the increase from 2018’s $228.2 million budget to next year’s $240.2 million budget, Finance Director Mike Loftin said.

“That is 5 percent over last year’s budget, primarily because of the increase in the capital budget,” Loftin said. “The operating budget is actually only six-tenths of a percent higher.”

The Galveston City Council approved the 2019 budget during a regular meeting Thursday afternoon at city hall, 832 25th St.

The city plans several significant projects to improve drainage, water and other infrastructure, according to budget documents.

A third of the $86.5 million capital budget goes to water-related projects, including an $18.2 million water line from the 59th Street pumping station to the airport pumping station.

Another 17 percent of the capital budget is devoted to drainage and sanitation work, each. The capital budget includes plans for street and drainage projects approved by votes in a May 2017 bond election

“We do have two bond sales tentatively planned for our capital improvement plan,” Loftin said.

Property taxes and water and sewer charges account for the greatest share of the city’s revenue.

About $34.3 million, or 30 percent, of the city’s revenues come from property taxes, according to reports in the city of Galveston’s proposed fiscal year 2019 budget document.

City council adopted a property tax rate of $0.561 per $100 of taxable value, slightly less than last year’s rate of more than $0.562.

“That is less than this year’s effective rate,” Loftin said. “From a technical standpoint, we are cutting the tax rate and cutting taxes by adopting that rate today.”

Island Transit’s restored status as an urban transit system allowed federal funding to increase, according to the 2019 budget document highlights.

“Very importantly, the Island Transport subsidy from property tax is down from three years ago,” Loftin said.

Another 31 percent of the city’s revenue, or $35.9 million, comes from the water and sewer charges.

The city began the budget process back in April and May.

The city’s fiscal year begins Oct. 1.

Keri Heath: 409-683-5241; keri.heath@galvnews.com or on Twitter @HeathKeri.

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(6) comments

Clinton Stevens

“From a technical standpoint, we are cutting the tax rate and cutting taxes by adopting that rate today.”

That’s political speak for, “you are going to have a higher property tax bill this year”.

Does the the city anticipate collecting more or less revenue than last year? If the answer is more, that is by definition a tax increase. A tax decrease would be lowering the effective rate to an amount that generates the same or less revenue than the prior fiscal year.

If there are expense that dictate more revenue be generated then very well but let’s not disguise what it is.

Brian Maxwell

We are below the effective tax rate. You need to understand the calculation and how new builds impact the tax rate. The city is collecting slightly more revenue but only because of added value (new construction). That is not calculated into the effective tax rate. That means an existing homeowner is paying less while those that added value and built new would obviously pay more as they have something this year that wasn’t there last year. Feel free anytime to come by or ask if you need help understanding. Thanks.

Clinton Stevens

So if a property’s (new construction notwithstanding) appraised CAD value increased you would not collect more revenue from that particular property? Interesting.

David Schuler

Brian, does your comment take into account the inevitable increase in valuation year over year? Your complex description eventually simplifies into the following: Will the check i write this year be larger than the check i wrote last year? If yes, taxes went "up".

Brian Maxwell

David, yes it does. That is what effective tax calculations do.....did the city raise more money from existing tax payers than it did the year before. We did not. We did see a rise in new construction which allowed us to have an effective rate lower than it was last year.

To answer Mr. Stevens question, taxes are considered by the city on aggregate. On aggregate existing tax values declined, this a lower effective tax rate. I know it’s confusing for some. Clint, let me know if you would like to chat and we can explain it a little better for you if you need. Always want the employees and voters to be educated. 👍🏻

George Croix

On aggregate, was the reason less money was raised from existing taxpayers because they got a tax decrease, or because there were fewer of them than last year?

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