During a Sept. 26 meeting, Katy City Council unanimously approved the fiscal year 2022-23 budget of $54.87 million and a property tax rate of $0.44 per $100 of assessed valuation. The tax rate includes $0.077688 for debt service and $0.362312 for maintenance and operation expenditures.
This tax rate is lower than last year's rate of $0.447168 per $100 of assessed valuation but greater than the no-new-revenue rate of $0.430733, which would have raised roughly the same amount of property tax revenue as it did the previous year.
Finance staff’s goals coming out of the pandemic were to slowly restore the budget to pre-COVID-19 conditions and present a structurally balanced budget in which expenditures do not exceed revenues, City Administrator Byron Hebert wrote in a memo to City Council, which was included in budget documents. Citing “a looming economic recession and consequences of instability in Europe due to war,” Hebert said finance staff kept sales tax projections conservative.
Still, the city projects a total tax levy on both residential and commercial properties of $18.99 million, an 8.8%, or $1.28 million, increase from last year’s budget.
This estimate is based on the larger average taxable value of properties, which grew from $352,650 in FY 2021-22 to $393,773 in FY 2022-23—causing the average tax collected to rise from $1,577 to $1,733. Officials plan for increased revenues from this year’s budget to restore levels of service to areas that were deferred during the pandemic.
“This budget makes investments in drainage projects and street repairs and public safety and our parks department, among many other items,” Mayor Pro Tem Chris Harris said during the Sept. 26 meeting. “It's a good budget.”
The budget provides for investments in safety, mobility, infrastructure, high-performance management and continuous quality development, Hebert wrote in the memo. With the budget, Katy will invest a 1.5% increase to the salary grades, ranges and step structure of eligible city employees, effective Oct. 10.
Public safety—which includes the police, fire and animal control departments—claims a combined $21.75 million of the $40.05 million general fund expenditures. The police department has the highest share with $11.85 million.
In addition, the budget projects increased revenues in its hotel occupancy and debt service funds. Hotel occupancy increased by $71,900, while debt service increased by $6.83 million.
Meanwhile, revenues from the enterprise fund decreased by $1.64 million. The enterprise fund comprises the city’s water, sewer and utility departments.
Hebert commended city staff for their dedicated service to the community, which remained steadfast through storms and economic downturns, he wrote in the memo. Ultimately, he said, city staff stayed committed to their financial principals.
“Our financial philosophy has always been ‘revenue is reality,’ which we will keep and hold the property tax to a minimum,” he said.
