During City Council's meeting Sept. 12, members voted 6-2 to approve the budget. Mayor Pat Hallisey and Council Member Larry Millican were opposed, stating they did not favor dropping the tax rate so low.
The tax rate to support the budget is proposed at $0.415526 per $100 of property valuation, which is $0.05 cheaper than the FY 2021-22 rate of $0.465526. The proposed rate is also over $0.005 lower than the no-new-revenue rate of $0.4208876. The no-new-revenue rate is the rate the city would need to use to bring in the same amount of property tax revenue in FY 2022-23 as it will in FY 2021-22.
Both Hallisey and Millican did not want the rate to drop so low.
Hallisey said to keep cutting the tax rate just for the emotion of cutting taxes is like playing Russian roulette with the tax rate. Hallisey wants a lower rate, but he wants it lowered responsibly, and he does not want residents to wake up one day and realize the city services they have become accustomed to are no longer affordable, he said.
"We have to be careful, and we have to be wise with public money," Hallisey said.
Other council members said the half-cent rate decrease will be negligible for residents and the city. The cut will save residents the equivalent of one Starbucks drink a month, and the no-new-revenue rate would bring in such a small amount to the city that it would not even pay for a mile of sidewalk repairs, Council Member Chad Tressler said.
League City's fiscal sustainability will not be decided by a half-cent change in the tax rate. It will be decided by looking at zoning the city properly to attract growth. If that action is not taken, future councils will be forced to choose between reducing services or increasing taxes, Tressler said.
Council Member Nick Long pointed out that small changes can make a big difference. Additionally, the budget includes increasing the capital projects budget by $61 million over FY 2021-22. In total, the capital budget is almost $150 million for FY 2022-23, he said.
"We are reinvesting to the tune of more than we ever have," Long said.
Long said it is important for fiscal discipline to limit the size of government's growth so it cannot grow in perpetuity.
The budget totals $318.63 million, $148.25 million of which is for capital projects. For comparison, the fiscal year 2021-22 budget is $252.25 million, $87.03 million of which is for capital projects, according to city documents.
The budget funds 11 new positions, including two EMTs and two paramedics to staff a new ambulance as well as a community outreach coordinator to support the city's animal shelter. The budget also includes reclassifying six existing positions and an additional daytime stipend crew for the League City Fire Department; merit and cost-of-living increases; and a compensation study for employees.
With the second and final reading of the budget passed, City Council at the Sept. 27 meeting will vote on the proposed tax rate.