The Magnolia City Council unanimously supported a proposed one-cent decrease to the rollback tax rate for the 2015 fiscal year at a special meeting Aug. 6. The proposed tax rate will reduce the rate from $.4786 to $.4629.

"We lowered our [proposed rollback] tax rate for the fourth year in a row," Mayor Todd Kana said. "We had to make tough decisions. I think by scaling this back when we have the opportunity, we may be making tough decisions for councils in the future, but I think they need to be making those tough decisions."

The rollback tax rate provides the Montgomery County tax assessor-collector's office with tax revenue based on the amount the city spent the previous year as well as debt service and an 8 percent increase for operations in the 2015 fiscal year, according to city documents. The city of Magnolia is able to fund the police department and other public services through rollback taxes collected from property owners.

With an average home valued at $131,157, many property owners will pay about $607 each year in taxes to the city, Magnolia City Administrator Paul Mendes said.

"That works out to about $1.66 per day for police protection and city services," Mendes said. "That's not bad for one of the safest cities in Texas."

At the proposed rollback tax rate of $.4629, the city is expected to receive $753,496.99 in revenue. Last year, the city brought in $779,053 in rollback tax revenue. Despite projecting a decrease of around $25,000 in revenue from the rollback tax, officials said the city will make up for that loss through other revenue streams.

Council member Richard Carby said the city's overall property valuation for 2013 was $142 million and rose to $154 million in 2014. For 2015, the city's overall property valuation is estimated at $162 million.

Carby said because of the increase in property valuations in Magnolia, which will lead to more property tax revenue, the council was able to decrease its rollback tax rate for the 2015 fiscal year without losing any revenue.

Council members Jonny Williams and Anne Sundquist did, however, voice concerns about lowering the proposed rollback tax rate too drastically. Williams and Sundquist said the city might need to raise the rate in the future to regain lost revenue if property values do not continue to rise.

"I pay taxes just like everybody else," Williams said. "Here's what I would hate to see happen—if we lower [the rollback tax rate], it's always harder to come back and get it back. If something happened and we didn't have a reserve and we had to raise it next year or something, that's going to really create [an issue]."

Williams and Sundquist compromised and voted with the other council members to lower the proposed rollback tax rate about one cent by the end of the meeting. A second public hearing for the proposed rollback tax rate is scheduled for 7 p.m. on Aug. 26.

The rollback tax rate is due to the tax assessor-collector's office by Sept. 1 for approval.