'This is a long-term decision:' Pflugerville City Council debates proposed tax rate, implications of Senate Bill 2

Cities across the state of Texas are weighing the implications of Senate Bill 2 as they prepare final property tax rate and budget proposals for fiscal year 2019-20. City officials said Pflugerville is no exception.

Pflugerville City Council held an hour-long discussion regarding the city's proposed tax rate and budget at its Sept. 10 meeting, following the city's first public hearing for its proposed tax rate. The budget discussion, initially held prior to the public hearing, was reopened by Council Member Doug Weiss following citizens' voiced disapproval of the proposed rate increase, listed at $0.5045 per $100 of taxable value.

“Cities and churches should never have excess money," Council Member Jeff Marsh said. "The only problem with that, churches get donations and cities don’t. Is there some kind of middle ground we can meet? I think so."

Marsh recommended cutting down on the portion of the budget allotted to city council, adding that he felt $30,000 for the council's annual budget could be trimmed down to $5,000 and could then allocate the funds elsewhere to better serve the community.

Weiss, regarding the 7% sales tax revenue the city has factored into its budget, said the city has underestimated the amount it has collected in sales tax in years prior. He requested that city staff revisit the budget proposal and adjust based on a 9% sales tax revenue assumption and consider the trimming they could do based on the recalculation.

Council Member Jim McDonald said he stood behind recommendations provided by city staff and the city's finance and budget committee, which includes volunteer citizens.

“This is a long-term decision,” McDonald said. “This could have longer term impact given the state requirements based on what we are able to do.”

He pointed to the uncertainty cities now face following the passing of Senate Bill 2 in the Texas State Legislature, which limits a city's ability to raise its maximum property tax rate without voter approval. The legislation, signed into law by Gov. Greg Abbott June 12, will go into effect in fiscal year 2020-21.

“In this time of uncertainty, I think it’s important to go with the recommendation of our finance and budget committee," McDonald said. “I caution us in terms of thinking about the fiscal health of our city.”

City Manager Sereniah Breland said the budget she presented to council for consideration was "extremely conservative."

“This is not an egregious budget," Breland said. "This is years of deferring.”

Breland said if council considered adjusting sales tax revenue estimates, she would want to prioritize the $1.7 million in funding already cut from the current budget proposal before considering lower the tax rate.

“I can cut, cut, cut," Breland said. "You’re just cutting services.”

Mayor Victor Gonzales reflected on the number of residents who had spoken during the Sept. 10 public hearing, saying their concerns needed to be taken into consideration when finalizing the city's budget and tax rate.

“I think we have to be attentive to that," he said. "Is it going to be painful? Yes, definitely.”

Following council deliberations, Breland said she will add an agenda item to the council's Sept. 17 meeting to discuss and consider revisiting a reduced scope budget proposal.

Marsh credited the work of previous city councils and city staff who made Pflugerville a desirable place to live and contributed to the city's growing population, while also adding that the restraints of Senate Bill 2 have complicated how current and future councils will consider tax rate increases and budget season moving forward.

“How do you do the stuff the citizens want," Marsh said, "while doing your damndest to keep the tax rate low?”
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