Officials: Time to cut tax rate

LEAGUE CITY — City officials are eyeing a property tax rate cut after administrators determined the city had been reserving more money than it needed.

The city has proposed adopting the effective tax rate of 61.6 cents per $100 of assessed property value, down from the current rate of 63 cents. The effective rate is the rate that would generate last year’s revenues with this year’s appraisals.

“We adjusted our expenditure budget to the level departments actually were spending,” Mike Loftin, League City’s finance director, said. “The budget was being overstated. The city was saving more money than needed.”

The proposed cut will save the average League City homeowner $24.50 in property taxes next year, City Manager Marcus Jahns said.

City council members terminated Magnolia Creek Tax Increment Zone No. 1 after the city finished paying its debt to the developer.

The dissolution of the zone provides additional taxable value to the city, which allowed the effective tax rate to drop 2.2 percent.

Property appraisals increased by 2.2 percent, which also helped decrease the rate.

The $163.6 million budget reflects a 2.8 percent spending increase compared to the current budget.

Next year’s main expenses include $25 million on road construction, $4 million to renovate city hall and $4.8 million on design plans and possibly purchasing land for a new police station and jail.

The city will fill nine new positions, including a full-time fire chief for the volunteer fire department. The fire department will receive three new pumper trucks to replace older equipment.

City employees won’t receive a cost of living raise, but the budget will include $249,000 for 2 percent performance pay raises based on individual and departmental success.

Health insurance premiums for employees will increase by 10 percent.

City officials have not identified how to pay operating costs for Eastern Regional Park, a 28-acre park planned for construction south of state Highway 96 in the Tuscan Lakes area.

City funds and possibly sales tax money might be available to operate the park, Loftin said.

The city council is scheduled to adopt the budget after a public hearing Sept. 14.

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League City Budget Breakdown

Total revenue for the coming year: $88.9 million

Total revenue for the past year: $86.8 million

Reason for major changes: Increased property values, more taxable property

Taxable property value for the coming year: $5.34 billion

Taxable property value for the past year: $5.23 billion

Proposed tax rate: 61.6 cents

Current tax rate: 63 cents

Percentage difference: 2.2 percent

Tax on a $100,000 home last year: $630

Tax on a $100,000 home under the proposed tax rate: $616

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At A Glance

WHAT: League City budget and tax rate public hearing

WHEN: 6 p.m. Sept. 14

WHERE: Council chambers, 200 W. Walker St., in League City

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On The Web

To view League City’s proposed budget visit http://www.leaguecity.com/admin/DocumentView.aspx?DID=3349&DL=1