City Manager Kim Turner said the numbers provided from the Bexar County Appraisal District appear to be incorrect, and after consulting with a tax expert, staff claims keeping the tax rate the same at $0.589398 per $100 valuation would result in a surplus in tax revenue.
“After meeting with a consultant, she showed us a different way on how to calculate the tax rate without using the county’s numbers,” Turner said. “That is the process that we went with."
Prior to the new calculations, the proposed tax rate was $0.656205 per $100 valuation, which residents spoke against at an Aug. 30 public hearing.
Resident Kim Igleheart said council keeping the tax rate the same as the previous budget would result in an unbalanced budget that residents are not in favor of.
“At the last council meeting, this council committed to a balanced budget, no surplus,” Igleheart said. “That was the vote. It was $0.65 because that is what we needed to balance the budget. Now, they are saying we need $0.589 with a $1.1 million surplus.”
According to Turner, for residents that are under the tax freeze that passed in November 2021, a change in tax rate will not result in a decrease of taxes paid unless the percent change of the tax rate is greater than the percent change of property values.
According to staff, for property owners who saw an estimated 10% increase in property value, the tax rate would need to decrease an estimated 10% before those owners saw a decrease in taxes they pay.
Council Member Steven Buck said he is skeptical about the new calculations and worries about the city not meeting the estimated revenue due to any errors.
“We are essentially going against Bexar County,” Buck said. “We are telling Bexar County, ‘no, you are wrong,’ and I applaud that, but I am also open to the possibility that we are wrong.”
Through discussion, Council agreed to set the new total rate at an estimated $0.54 per $100 valuation, which would result in a total estimated property tax revenue of $10.03 million. The new rate is a decrease from the FY 2021-22 rate of $0.589398 per $100 valuation.
City Council approved the tax rate and updated budget in a 5-1 vote with Council Member William Shelby against the new rate.
The rate is not final until after the second reading, which will be held Sept. 20.
