Lakeway to decrease property tax rate

[caption id="attachment_181867" align="alignright" width="460"] Lakeway City Council confers on its proposed tax rate for fiscal year 2016-17.[/caption]

Lakeway City Manager Steve Jones proposed a fiscal year 2016-17 property tax rate of $0.1612 per $100 valuation for city residents, just slightly below the municipality’s FY 2016-17 effective tax rate of $0.1613, during the City Council’s Aug. 22 budget session. The proposed FY 2016-17 property tax rate is also lower than the FY 2015-16 property tax rate of $0.17.

The rate would save residents a minimal amount—about $1—on their tax bills based on the average 2016 Lakeway home property valuation of $472,011, he said. The average 2015 Lakeway home valuation was $449,923. The proposed savings accounts for the average home valuation increase, he said.

Council is set to adopt the FY 2016-17 budget and tax rate Sept. 19.

“[FY 2016-17] is the first time we are actually lowering taxes—going below the effective tax rate,” Jones said.

According to the Texas Comptroller of Public Accounts, an effective tax rate is the rate that would produce the same amount of tax on the same property—given a variation in valuation—from one year to the next.

The proposed rate is “an anomaly” and the result of an increase in Lakeway’s FY 2015-16 sales tax combined with a projected city savings in health insurance coverage for staff, Jones said.

“This is not going to happen every year,” Mayor Joe Bain said of the FY 2016-17 budget proposal to decrease taxes.

Other FY 2016-17 budget proposals include:

• Realigning pay raises for city staff to the area’s average pay scale at a total cost of $464,933
• Adding new city staff positions totaling $357,000 including an administrative assistant, two police lieutenants, a dispatch supervisor and a deputy clerk for six months
• Accepting a bid for a new city staff healthcare carrier for FY 2016-17 that results in a 4 percent increased cost over FY 2015-16. This budget item that was initially calculated at a 30 percent increase over the previous year
• Accounting for a decline in the city’s building and development permits issued, with $1.4 million budgeted for service revenue in FY 2015-16 and $1.2 million budgeted for FY 2016-17