The proposed rate—a 3-cent increase from the current tax rate of $0.60 per $100 valuation—will be the highest tax rate for the city in a 10-year period, according city data. It could generate an additional $3.48 million in tax revenue. Property owners with homes valued at $50,000-$300,000 could face annual tax increases of $15-$90. The average value of a home in Missouri City is $231,882.
Compared to neighboring cities, such as Pearland and League City—with current rates of $0.685059 per $100 valuation and $0.565 per $100 valuation, respectively—Missouri City falls somewhere in the middle, said Edena Atmore, Missouri City’s chief financial officer.
Council Member Jeffrey Boney, representing District B, said residents should remember that other cities like Sugar Land have lower tax rates—currently at $0.31762 per $100 valuation—because they rely more on sales tax revenue.
The staff presentation indicated the proposed budget for FY 2019 includes $51 million in total expenditures. However, the data is not yet definitive, City Communications Director Stacie Walker said.
Another thing to consider is that voters approved last November to shift the city’s fiscal year from July 1-June 30 to Oct. 1-Sept. 30, said City Manager Anthony Snipes.
“One of the challenges with a 15-month budget is you have to raid the fund balance in order to cover the costs to get you from July 1 to Sept. 30,” Snipes said. “We’re estimating that, for that three months, our extended budget goes to $60 million, but we only have the revenue to cover about $55 million.”
Staff has already cut a total of $2.1 million in costs when reviewing departmental budgets, Snipes said.
The city should look beyond cutting costs as it only puts a Band-Aid on the problem, said Yolanda Ford, council member and mayor pro tem.
“We’re already working on the bare minimum,” Ford said. “We have less staff than we need to operate on a day-to-day basis.”
One way to generate more funding for the city depends on a strategy to approach economic development, Ford said.
“[We can] look at what we have—the 15 percent of land development that we do have left—and be very conscious of what we are encouraging to come in for development, so those businesses can increase our tax base,” she said. “We can’t keep going constantly to the residents, asking for more money from property taxes, because that’s not really solving the problem.”
The city is making progress in growing the commercial tax base, said Joe Esch, director of economic development.
“On average in the last 20 years, we do less than one project per year in economic development,” Esch said. “This year, we’ve had six.”
These projects include anticipated openings for a Best Buy distribution center, a Comcast regional service center, a NatureBest food processing facility and the redevelopment of an existing shopping center in the Quail Valley community.
Other budget considerations include planned capital projects related improving the city's drainage, public safety facilities, parks, water treatment and infrastructure, Assistant City Manager Scott Elmer said. After FY 2019, there is no more capital funding for parks and recreation or transportation projects.
City Council may propose another bond program in 2023 as the city's capacity to sell and issue bonds improves in the next five years, Elmer said.
Another special meeting to continue budget discussions is scheduled for 5:30 p.m. Wednesday, Aug. 29, at City Hall, 1522 Texas Parkway, Missouri City.