Lowering the property tax rate and a potential bond election were among the strategies discussed as Pearland City Council considered the end of the Shadow Creek Ranch tax increment reinvestment zone, or TIRZ, at its Nov. 9 special meeting.
Some context
The nearly 3,500-acre Shadow Creek Ranch TIRZ was established in 1998 as a 30-year agreement to fund infrastructure through property tax growth, as previously reported by Community Impact.
The TIRZ is scheduled to terminate at the end of 2028 when all existing projects must be completed, with final debt service payments and reimbursements due by September 2029, documents show.
Diving in deeper
The TIRZ accounts for around 25% of total assessed property value, city documents show. When it ends, the previously captured property value will be added back into the city's taxable value, increasing the tax base used to calculate property tax rates.
The change is expected to lower the debt-service portion of the voter-approval tax rate, potentially bringing it below the no-new-revenue rate, city documents show.
The city has an opportunity to lower the overall property tax rate while providing additional flexibility for city operations and infrastructure investments, Deputy City Manager Victor Brownlees said.
However, a significant rate decrease could limit the city’s ability to fund future projects without voter approval. The city is exploring ways to gradually lower the tax rate while addressing infrastructure needs, rather than allowing a decrease now that could lead to a spike later, Brownlees said.
In their own words
Council member Clint Byrom said reducing the cost of living in Pearland should be a priority, including lowering water rates and wastewater treatment costs. He also emphasized reducing the property tax rate.
“We know there are things we are behind on. Do we continue to stay behind or do we leverage some of it to help catch up while also providing tax relief?” Byrom said.
Council member Rushi Patel said residents should be involved in discussions about how the city uses its financial capacity, including how public funds are spent and whether to pursue a bond election.
Looking ahead
City officials will continue refining their analysis and discussing policy options with the council, with a strategy expected to be finalized in the next six to eight months, documents show.
