Note: This is the second in a series of blog posts about the proposed fiscal 2021 budget and tax rate.
To fund or not to fund street maintenance, that is the question.
And it’s a $1.5 million question that has a $2 per month impact for property taxpayers next year, as well as implications for the quality of neighborhood streets in the future.
Since 2012, the City has spent more than $37.1 million to maintain neighborhood streets. The cost is significant, but not nearly as expensive as having to completely rebuild streets that have failed or are in severe disrepair.
The City Council is wrestling over a decision to nudge up the proposed property tax rate to fund more of the neighborhood street maintenance program in the fiscal 2021 budget, or continue to defer funding along with other spending cuts in light of the COVID-19 pandemic.
The City Council approved a $4.3 million cut to street maintenance this spring as part of overall budget cuts due to forecast reduced revenues from the economic slowdown caused by the coronavirus.
“I would think deferred maintenance would cost more to catch up than if we did it now,” Councilmember Tammy Young said at Tuesday’s City Council work session.
Transportation Services Director Gary Hudder agreed, adding, “Not only would costs continue to escalate, but also as you kick the can down the road, obviously the problem starts getting bigger again.”
The City Council voted Thursday, Aug. 13, to set a proposed maximum tax rate of 43.9 cents. At that rate, the City would have $3.0 million for street maintenance. That rate would cost the owner of a median value home an additional $3 per month. The City Council is also considering a 42.9 cents tax rate, which would cost the owner of a median value home an additional $1 per month but include only $1.5 million for neighborhood street maintenance.
“Even at the 43.9 cent rate we’re still in the bottom quarter of tax rates among Texas cities,” Mayor Craig Morgan said. “The additional funds generated by that rate would go to core City services, and I think that’s what people want.”
The Thursday, Aug. 13, vote isn’t the final say on the tax rate; it just establishes the maximum rate the City Council can approve. The final tax rate vote will occur on Thursday, Aug. 27. The City Council could adopt a lower tax rate.
At the current proposed tax rate of 43.9 cents, the proposed budget reduces spending by more than $24 million from the original 2020 budget.
You can watch the City Council’s discussion on the proposed budget and tax rate at the Tuesday, Aug. 11, work session here.