Last week, city council failed to set a new tax rate. We adopted a budget, but then weren’t able to agree on a tax rate to support it.

An oddity in state law allows a budget to be adopted with four votes, but requires five to set a tax rate, and the vote was only 4-3.

At the insistence of three council members, staff is working to reduce the tax rate another penny per $100 valuation. One member insisted that we could reduce the tax rate by taking an additional $800,000 or so from our day-to-day operating fund, i.e. finance operations out of savings.

But that money is there in case we have a storm, exactly as we’re experiencing this week with Hurricane Nicholas. All the overtime incurred by police, fire, sanitation and street crews during an emergency comes from that fund.

But there’s another, even more important issue. Every year that we reduce the ad valorem tax rate below the 3.5 percent cap set by the legislature, the city’s general revenue available for operations shrinks, and further cuts have to occur.

Good, many will say. Lower taxes. Yay!

That makes a great sound bite when you’re courting votes in the short term at the expense of the city in the long run. But even a 3.5 percent annual hike is a losing proposition because everything is going up more than 3.5 percent a year.

Public safety costs will go up 9 percent next year. The charter-mandated payment to the Rosenberg Library will go up by 19 percent, to more than $4 million.

Everything from gasoline to asphalt to lumber to PVC pipe is up more than 3.5 percent. That’s the cost of doing business if you want city services to continue.

We’ve cut transportation and parks to the bone, can’t cut the library because of the charter, and collective-bargaining agreements with police and fire tie our hands there. Every year, services like street paving are being reduced.

My colleagues bitterly complain that city taxes are making Galveston too expensive to live in. But let’s do the math. The average home price in Galveston is just under $300,000. So one penny of ad valorem tax costs the average homeowner $30 a year. Thirty bucks. They don’t talk about windstorm or flood insurance. Or county taxes. Why not pick on school taxes? They’re twice what city taxes are. Why? Because that won’t get you votes.

We have one of the lowest tax rates in Galveston County, and one of the best-run cities in the country. We’re better prepared for a hurricane than we’ve ever been — light years ahead of where we were in 2008.

Fire a cop. Close a park. Don’t pave a street. Gain a vote and save $30. Vilifying the city as wasteful and corrupt, as some of my council colleagues do on a regular basis, may fire up the base, but it does a disservice to the people of Galveston.

David Collins is the city councilman for District 3 in Galveston.


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(11) comments

Bailey Jones

[thumbup] I agree. If you want services you pay taxes. A reasonable solution to our home insurance crisis would help residents more than a decrease in services.

John Merritt

Councilman Collins, you keep talking about tax rates. Tax rates are not the driving force in providing money for the city budget. The CAD has raised appraisals up to and over 100%. This will double taxes for many Galvestonians and provide a huge increase in revenue. Your slight discount in tax rates is not even a dent in the increase to come.

Brian Maxwell

Not if you are homesteaded. Actually if you have a homestead in Galveston you will see a tax decrease this year.

Jack Cross

Brian, you are and Councilman Collins are making a false argument, Mr. Merritt is correct, The appraisal increases will proved more revenue than the previous year. You know that, it has nothing to do homestead. About 90 percent of the high price homes on the west end are neither homestead or subject to over 65 they are second homes. Many of then have yearly tax bills in the amount of $20,000 annually

Jack Cross

Mr. Collins math is flawed.

First, he omits appraisals which means more revenue for the city if they do nothing. if the city stays below the 3.5 percent cap, say 3 percent, that is a pretty big tax increase.

Mr. Collins surely knows the way you make the budget is you lay out what you need and then in August the CAD gives taxing bodies the amount of revenue you will receive and build your budget on that. (cuts, increases, revenue =tax rate)

If the Galveston city council did nothing, they would have more money than the previous year. If they increase the Tax rate below the cap of 3.5 percent it would be a pretty big tax increase. From what I read in Mr. Collins column, he is saying that's not enough.

David Collins

Mr. Merritt, Mr. Cross,

If you have a homestead exemption and especially if you have both homestead and over 65 exemption, your actual city taxes will probably go down this year. The real impact of the valuation hikes falls on second homes and commercial properties.

And if you understood my point about rising costs, i.e 9% for public safety, 19% for the library etc, along with everything else, then no, 3.5% isn't enough to avoid cutting services.

I encourage everyone to watch city council workshop in the morning. We'll go into much more detail about the impact of the cap and proposed cuts.

Brian Maxwell

Nope. What he is saying is that we are below the 3.5% tax cap but our costs went up more than that. If you do the math Jack, you will see that homesteaded properties in Galveston will receive a tax decrease this year due to their own appraisal cap. The increase (still less than 3.5%) is primarily attached to non homesteaded properties (typically short term rentals, second homes and commercial accounts).

If you have a homestead in Galveston, you will receive a tax decrease under current proposals.

Charles Wiley

We have those caps because of politicians like you who never met a tax increase they didn't like. Read Jack Cross’ comment above! Live and learn Mr. Collins!

Jack Cross

Mr. Collins and Mr. Maxwell, Reread my earlier post. I am 100 percent correct. The Appraisals increased, That is the total amount and doesn't even include new construction amount. The CAD gave all the taxing units this amount by August 1. So you already know the amount of revenue.

Galveston will receive more revenue than the previous year if they do nothing. It has nothing to do with homestead or over 65 freezes. if the city were to go up to just below the 3.5 percent tax cap, it would result in a lot more revenue than the previous year an a sizeable tax increase. This is a fact.

Your arguments clearly are saying that 3.5 percent tax increase is not enough.

If you are not willing to cut expenses then go above the 3.5 % cap and let the voters decide. My guess is that you will accept my position and stay below the cap.

Raymond Lewis

Thanks Councilman Collins.

Jack Cross

Mr. Collins, you stated: "Why not pick on school taxes? They’re twice what city taxes are. Why? Because that won’t get you votes"

You are wrong again. The reason is that the state is in total control of school taxes. The state sets the amount per student funding and mandates minimum tax rate at $1.00 per $100.00 valuation and $1.17 Cap. Any protest would be against the state, not local.

The other tax system is local, here the state can't lower your property taxes because the state does not set the tax rate. The state Comptroller is the governing agency over cads and forces the CAD to appraise as 100 percent of market value. With the caps in place and after the school district takes their share of funding, the state takes the property values in the school taxing district and put it in the state budget.

Schools must admit non citizens, no questions asked. Schools must provide equal funding to all school districts, these property poor school districts are increasing. You are correct about going after school taxes, but the problem is the state and the millions of poor students.

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