By Matt Smith/msmith@trcle.com
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A Tuesday called meeting of the Cleburne City Council prompted several residents to chime in on the proposed increase in city property tax rates. All voiced opposition to the measure.
City leaders are finalizing the budget for the upcoming fiscal year, which begins Oct. 1.
The proposal calls for raising the property tax rate, which is presently 62 cents per $100 of valuation. City staff members have recommended raising the rate to 70.64 cents per $100.
Decreased property values coupled with an increase in property tax exemptions for certain residents — mainly for senior citizens and some veterans — necessitated the need to request the increase, staff members said.
“Property values have gone down about 10 percent while exemptions have gone up 9 percent,” Cleburne Finance Director Greg Wilmore said. “Which means fewer dollars to multiply that tax rate by.”
Some of those exemptions, such as waiving property taxes for veterans who are totally disabled, are driven by state legislative mandates, said Kim Galvin, budget and purchasing director, and as such represent factors the city has no control over.
Falling sales tax revenues and other economic conditions have made this a particularly tough budget planning year for Cleburne as they have for many other cities throughout Texas and the country, staff members said.
Three residents who spoke during the public hearing on the rate proposal disagreed.
“The more money you have, the more you tend to spend,” Cleburne resident Debbie English said. “Which is something my family has not experienced in recent times. But when you don’t have it, you look at cuts or just plain doing without first.”
English suggested that the city work more diligently to collect funds due from owners of properties with delinquent taxes.
“It’s hard to believe you’re considering a tax increase in this economy,” Cleburne resident Alden Nellis said. “Think of the taxpayers first this time. As individuals you [city council and staff] may not be feeling the pinch of this economy, but most of your constituents are.”
City resident Raymond Dinsdale suggested using gas royalty funds, which are collected from gas leases on city owned properties, to fund shortfalls before tax-rate increase considerations.
“If property values go back up in the future, you’re not going to lower our tax rates,” Dinsdale said. “We’re all being asked to tighten our belts right now, and I don’t think the city of Cleburne should be any different.”
Although council members did not respond to Dinsdale’s suggestion to use gas royalties, city leaders have long contended that such funds should be used exclusively to fund one-time capital projects, not to fund budget shortfalls or day-to-day city operations.
Nellis spoke a second time, targeting staff salaries and tax abatements offered to business and industry.
“Cut salaries of personnel instead, because we have several overpaid people with the city,” Nellis said. “Now the tax abatements, which I spoke out against, have come back to haunt you.”
Such abatements, Galvin said, account for only 1.1 percent of Cleburne’s property tax exemptions. Abatements play a role, officials said, in attracting business and industry, and in turn jobs, to the area.
Councilman Bob Kelly said Cleburne’s tax rate is among the lowest in the area and added that it’s probably been too low in recent years.
“We realize we’re in a down economy, and I think we’ve all felt the pinch in one way or another,” Kelly said. “But our city staff has worked diligently to cut costs and keep services up.
“Since I’ve been on the council, there have been, I think, three or four tax cuts. While that puts us in an enviable position, I think that’s also part of the problem. We cut our tax rate too low and now we’re scrambling because we don’t have the tax-rate base that we had to utilize before.
“It’s not that we haven’t studied and tried to figure out what we could cut. But I’ve said for three years that we probably needed to maintain a tax rate of about 70 cents per $100, and I still maintain that.”
Mayor Justin Hewlett agreed.
“As Councilman Kelly said, I think we probably had some unnecessary tax cuts that caused this.”
The proposed 70 cents per $100 rate is still below the rates in 2002 and 2003, Hewlett said.
Council members will formally vote on the rate at 7 p.m. Sept. 14 in city hall.
Council members did approve the budget for the new year during Tuesday’s meeting.
The budget includes none of the employee pay raises or new capital project funding that was present in recent budgets.
A proposal to cut longevity pay for eligible employees back to the state-mandated level of $4 per month was scrapped, for now. City Manager Chester Nolen said the matter will have to be addressed by council in the near future but said that discussion is off the table for this year. Some long-term employees receive up to $16 per month in additional longevity pay.
The city has, so far, managed to avoid employee pay cuts, lay offs and furloughs.
Officials hope enough eligible employees will accept early retirement packages and help the city avoid employee pay and other cuts.
If 15 employees accept early retirement, it will save the city about $950,000. That coupled with the property tax increase will be enough to overcome the city’s projected $1.7 million shortfall, officials said.
Letters to eligible employees will soon be sent out to give them time to decide and, if they so choose, to retire on Dec. 31. The early retirement incentives range, depending on the employee’s years of service, from 160 to 320 hours of pay, officials said.
