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.