Missouri City City Council approved the first of two readings of an ordinance that would add an additional $10,000 in tax exemptions for Missouri City residents age 65 and older as well as a 2.5% homestead exemption.
City Council approved the first reading in a 4-3 vote during its June 6 meeting. The ordinance will not be officially adopted until City Council votes on the second reading during its upcoming June 21 meeting, according to City Council discussion.
The first reading of the scenario that was approved was proposed by Mayor Pro Tem Jeffrey Boney.
“Across the board, when you look at the scenario I’m proposing, and the information that was presented, Missouri City residents will receive an estimated half a million dollars plus in tax savings, which tax exemption for every resident will be done for the first time in Missouri City history,” Boney said during the meeting.
Homestead exemptions, which remove part of a home's value from taxation, are allowed under the Texas tax code, but must be adopted before July 1, according to the Texas tax code.
That means that using an average home value of $269,128, a 2.5% homestead exemption would reduce Missouri City’s property tax revenue by approximately $680,000 while saving the average homeowner about $40 on their property tax bill, according to city documents. That exemption would apply to nearly 17,000 homesteads.
If the second reading is approved as is, the ordinance would increase the 65 and older exemption from $15,000 to $25,000. That would result in an additional loss of property tax revenue of $382,833 for the city at an annual savings of $144.51 for residents 65 and older, according to agenda documents.
In total, when combined with exemptions for disabled residents and exemptions for residents over 65, Boney’s proposal would equate to $769,805 in tax savings for Missouri City residents, Boney said.
Should Boney’s existing proposal be approved on the second reading, exemptions for disabled residents would remain flat at their current rate of $10,000. According to Boney, not increasing that exemption for disabled residents comes because the city’s future financial situation remains unclear.
While the first reading was ultimately approved, Council Members Vashaundra Edwards and Monica Riley expressed concerns about moving too quickly to approve the additional tax exemptions.
“I’m not comfortable with the additional scenario that Mayor Pro Tem Boney brought up,” Riley said during the meeting. “I’m not sure if we have looked long term where our economy is going. I know that our projections show that we’re doing very well, but with everything going on around the nation, I do have concerns about introducing the homestead exemption. Although it would be wonderful for us to offer that and bring that to our residents and alleviate some of that weight off of them, I think we’re moving extremely fast on that particular proposal.”
Edwards raised an additional concern about ensuring the tax exemption proposals do not have a negative effect on the city’s ability to fund public safety staff.
“My concern was making sure we retain the officers that we have and the competitive salary amount,” Edwards said. “I do think it’s a great thing that we are providing the tax exemptions, but I also want to make sure that we have enough public safety members to maintain the safety and security of the city.”
Approval of the first reading comes as Sugar Land City Council approved the first reading of an ordinance increasing the city's homestead exemption by 1%.
