The small conference room was filled with residents and business owners who attended a public hearing on the tax rate at 6 p.m. Wednesday, Sept. 11, at Fredericksburg City Hall. Most of them came to voice their concerns about the new tax rate.
Proposed tax increase
Since the city is proposing a new tax rate of $0.232284 per $100 valuation, higher than the effective tax rate of $0.207284 per $100 valuation, it must have two public hearings to let residents know why it was proposed and hear their concerns.
City Manager Kent Myers gave everyone in attendance a list of what is driving that tax rate, as well as what it would mean for property owners.
For example, if a homeowner’s property is valued at $322,913, he or she would pay $750.08 in property taxes. With the rate as it is now, a homeowner with this home value would pay $669.35 in property taxes.
Property taxes cover 27% of the city’s General Fund revenues, which is the second largest source behind sales taxes, which cover 40%.
Myers said in the past two years, funding for city services has increased. Police funding is up 10.7%, funding for fire services is up 33.7%, EMS funding is up 14.9% and parks funding is up 54.6%.
Some new funding driving these costs up for Fiscal Year 2020 are a new police officer position, new police vehicles ($195,622), a new fire truck ($100,000 for eight years), a new ambulance vehicle ($95,000 for three years), a street traffic study ($75,000), sidewalk improvements ($100,000), a new restroom at Lady Bird Johnson Municipal Park ($240,000) and Marktplatz improvements ($138,000).
While the city’s proposed tax rate may be higher than the effective rate, it’s lower than several cities’ current tax rates. For example, Kerrville’s tax rate currently sits at $0.55140. Myers said the city is fortunate to have that.
“The reason our tax rate is so low is because we get so much sales tax per person,” Myers said. “We only have about 11,000 people who live in the city of Fredericksburg, but we have thousands more people coming in every day and supporting our budget with the sales taxes they’re paying.”
Myers pointed out that cities like Kerrville, Boerne and Marble Falls don’t collect as much in sales taxes.
Most in attendance were “appalled” and confused by the increase.
Robin Fleck, a business owner in Fredericksburg, also owns a business in Prescott, Arizona, also a tourist town. She operates out of a building in Prescott twice the size as the one in Fredericksburg, but pays almost the same amount in property taxes.
“My point is if your property appraisals go up (like Fredericksburg’s), then you should roll back, and I mean seriously roll back the percentage of tax,” Fleck said.
Annette Bennett was concerned about this, as well.
“I think that what happens is you begin to play a game with the taxpayers, which is the effective tax rate, the appraisals, etc., and it all gets very confusing,” Bennett said. “But the bottom line is that our appraisals keep going up, we keep getting new properties in town, new homes and new businesses, so there’s an extra pool to tax.”
Bennett said while locals should be seeing the property rate decrease because of those reasons, it continues to rise.
“I’m not asking for any justification. I’m just telling you that I’m here to stand strong against the proposed tax increase,” Bennett said.
Another concern frequently brought up was affordable housing. Some residents felt raising the property tax rate makes the idea of affordable housing more of a dream than a goal.
One commenter mentioned higher taxes being passed on to business owners who rent their property. He said employees are being taxed out of the market and may choose to relocate.
Before the meeting ended, resident Sandy Hollander said she wanted to go on record saying they were against the tax rate increase, and hopes the council will consider the public’s concerns before adopting the rate.
Council member Gary Neffendorf said he was happy with the attendance, and will consider the concerns. Mayor Linda Langerhans was also pleased with the turnout, and encouraged residents to keep showing up to special meetings and council meetings and if something is being done that a resident doesn’t agree with, he or she should voice their opinions at the meetings or call one of the council members.
Next tax rate public hearing will be in conjunction with the next city council meeting at 6 p.m. Monday, Sept. 16, at the Law Enforcement Center, 1601 E. Main Street.