In advance of finalizing a fiscal year 2019-20 budget, the city of Hutto is weighing an increase to its tax rate.
“It is the smart and financially responsible thing to do,” Michel Sorrell, the city of Hutto assistant city manager and chief financial officer, said in a July 12 release. “We are one of the fastest-growing cities in the state, and that growth comes with a cost.”
City officials cited Senate Bill 2—legislation approved by the state this year which limits the amount a city can increase its tax rate without voter approval—and the passage of the November 2018 bond as reasons behind the proposed tax rate increase.
“With this new limitation, we must revise our tax rate appropriately to provide the necessary funding for services like public safety, public works and upgrades to infrastructure needed to keep up with the growth we are experiencing and expecting,” Hutto Mayor Doug Gaul said in the release.
The November 2018 bond called for improvements to infrastructure, including roads and utilities; public safety, including police and judicial facilities; and parks.
“Voters supported a tax increase with the November 2018 bond election projects which will improve our streets and drainage, parks and public safety,” Gaul said. “We want to deliver these projects in the most cost-effective and responsible way possible while ensuring the long-term financial health of our city.”
Weighing the options
Sorrell presented three options to Hutto City Council on July 11:
Option 1 would increase the tax rate from $0.51 to $0.62 per $100 of taxable value. This option would provide enough funds to cover debt related to the November 2018 bond. However, the tax hike would not cover costs associated with the increase in services, such as staff to operate the new Justice Center, according to the release.
Option 2 would bump the tax rate to $0.64 per $100 of taxable value. This option covers debt related to the November 2018 bond and provides funding for additional staff to operate the new Justice Center.
Option 3 would hike the tax rate to the city’s current rollback rate of $0.68 per $100 of taxable value. This option covers debt related to the November 2018 bond, staffing needs, related vehicles and equipment.
Hutto City Council will conduct two public hearings on the proposed tax rate: Aug. 1 and Aug. 15. Council is expected to set the new tax rate and adopt the city’s FY 2019-20 budget in September.