As preliminary 2019 League City budget grows, tax rate continues to decrease

Despite League City’s population continuing to grow, staff getting stretched thinner and operation costs increasing, the city’s property tax rate is expected to continue its downward trend.

According to the preliminary 2019 League City budget, the property tax rate next year will be $0.5638 per $100 valuation, a minuscule drop from this year’s rate of $0.5650 and a 10.5 percent reduction compared to 2010’s rate of $0.63.

Under the city’s homestead exemption, those whose League City homes are their primary residences can be exempt from property taxes up to 20 percent of their homes’ values. This effectively lowers the proposed 2019 property tax rate to $0.451 per $100 valuation, according to the preliminary budget.

The balanced 2019 budget is proposed at $207.76 million, which is 3.01 percent higher than the 2018 budget of $201.67 million. The increase is keeping up with the city’s growth in population, which rises about 3,000 residents each year to where it is at about 105,000 people today, City Manager John Baumgartner said.

The 2019 budget includes $131.06 million in operational expenses and $76.7 million in capital projects, said Angie Steelman, budget and project management director.

The city has budgeted to hire next year 14.5 new full-time employees, including an assistant attorney, a parks custodian and two paramedics, Baumgartner said.

“Those are the things that drive the creep in the budget,” he said. “Our job is to provide the community with the services and projects that they desire.”

League City’s taxable appraised value has increased from over $5 billion to $8 billion in 2018. Property tax revenue has increased from about $33 million in 2010 to an estimated $45 million in 2019.

“We live in a great community … and our property values are growing at a rate faster than inflation,” Baumgartner said. “That’s probably the biggest reason we’re able to reduce our tax rate.”

Ever-growing sales tax revenue also helps keep the property tax lower, he said.

League City taxes 1.75 percent on top of the state sales tax of 6.25 percent, making sales tax total 8 percent, Baumgartner said.

In 2010, the city collected just over $10 million in sales tax. In 2017, the city collected about $17.5 million in sales tax, according to the budget.

This year, the city projects it will collect $20 million in sales tax, and that amount is expected to grow to over $27 million by 2023, according to the budget.

There is an increasing number of retail opportunities in League City, and more people are buying things in the city. Those repairing their homes after Harvey contributed a lot to the sales tax, Baumgartner said.

The League City City Council will likely approve the budget at its Sept. 11 meeting. It is scheduled to set the property tax rate Oct. 9.
By Jake Magee

Editor, Bay Area & Pearland/Friendswood

Jake has been a print journalist for several years, covering numerous beats including city government, education, business and more. Starting off at a daily newspaper in southern Wisconsin, Magee covered two small cities before being promoted to covering city government in the heart of newspaper's coverage area. He moved to Houston in mid-2018 to be the editor for and launch the Bay Area edition of Community Impact Newspaper. Today, he covers everything from aerospace to transportation to flood mitigation.