Friendswood’s proposed fiscal year 2021-22 budget has shifted a bit since it was originally presented in July.
Revenues and expenses were both reduced by $383,000. Most of this reduction—$342,000—was due to the tax levy being reduced after appraised values were lowered, said Katina Hampton, the city's director of administrative services and finance.
Previously, Hampton presented a budget that included $125.4 million in revenue and $123 million in expenses.
Additionally, miscellaneous revenue projections were reduced $41,000 to be in line with the amount the city has collected this fiscal year. The tax levy and miscellaneous revenue reductions total the $383,000 drop, Hampton said.
Additionally, the city reduced its budgeted expenses for next fiscal year by the same amount. One reduction for facilities makes up the bulk, totaling $279,000. This was for a lease agreement for the Blackhawk Building; the city now owns the building—which is being used by the city for storage, offices and other purposes—so the city no longer has to lease the facility, Hampton said.
Other expense reductions include $104,000 in general government and $38,000 in community development, among others, she said.
City Manager Morad Kabiri said the city has heard questions from some about why Friendswood ISD was able to reduce its tax rate when the city of Friendswood has not.
FISD’s FY 2019-20 tax rate is $1.2594 per $100 valuation, and the FY 2020-21 rate is $1.2394—a reduction of $0.02. Meanwhile, Friendwood’s FY 2019-20 and FY 2020-21 rate is $0.4873.
Kabiri explained FISD’s no-new-revenue rate—the tax rate at which a taxing entity would collect no additional property taxes than the year prior, not counting new construction—for FY 2019-20 was $1.1898, meaning its FY 2019-20 adopted tax rate of $1.2594 was $0.07 over the no-new-revenue rate. The no-new-revenue rate for FY 2021-22 is $1.1572, which means the adopted FY 2021-22 rate of $1.2394 is actually about $0.08 more.
Meanwhile, Friendswood’s no-new-revenue rate for FY 2019-20 was $0.4873—the rate the city adopted. The FY 2021-22 no-new-revenue rate is $0.453, meaning the proposed FY 2021-22 rate of $0.4873 is about $0.03 more.
Additionally, the reason Friendswood’s tax rate will likely end up higher than the no-new-revenue rate is because of a voter-approved bond program from 2019, Kabiri said.
Kabiri said he does not mean to disparage FISD but show FISD is not achieving something the city cannot by lowering its tax rate.
Council Member Trish Hanks also pointed out legislation from the 2019 Texas legislative session makes it so the state funds more of school districts’ operations, allowing districts to lower their property tax rates. That partnership is something cities do not have, she said.
“That makes a difference, too,” Hanks said.
City Council will meet Sept. 13 to approve the FY 2021-22 budget and tax rate.