LAKE JACKSON — Residents will experience the city’s first tax rate increase in 11 years to cover voter-approved bond payments from 2016.
City Council officially adopted the tax rate of 34.82 cents per $100 of property value at its meeting Monday, along with the city’s 2019-20 fiscal year budget.
This was a 1.3-cent increase from the current fiscal year’s property tax rate of 33.52 cents per $100 of property value.
This rate increase is 6.4 percent higher than the effective tax rate of 32.738 cents per $100 of property value, according to the city’s proposed budget. The effective tax rate is that which would generate the same amount of revenue as the previous year from properties on the tax rolls both years.
Sales tax is still the biggest source of revenue for the city, followed by industrial district revenue, then property tax, according to the proposed budget. The increase still leaves Lake Jackson with one of the lowest tax rates in the state, City Manager Bill Yenne said.
The council unanimously approved the budget and tax rate at its meeting Tuesday.
It was “months of hard work on the staff’s part,” Councilman Vinay Singhania said.
The increased debt payments stem from the $9 million of debts issued last year for the third phase of downtown revitalization, Yenne previously said. This will be covered by an increase of 0.936 cents per $100 of property value, according to the proposed budget.
Weeks after the July budget workshop, city staff expected $103,000 less in revenue than originally budgeted after the city’s certified values came up $30 million less than expected.
The city manager was able to make up for $60,000 of that by increasing revenues from permit fees and court fines, but mostly from interest income of “very secure investments,” Yenne said.
The operating budget decreased by about $41,000 because the city employee health insurance prices did not increase this year, Yenne said.
The city had budgeted for a 2.5 percent increase, but instead did not see any increase, meaning they could subtract $41,000 from their projected expenses, Yenne said.
The new fiscal year starts Oct. 1.
Also at Tuesday’s meeting, council unanimously accepted the first reading of a 3.3 percent increase to the utility base bill that includes water, sewer and garbage service, according to the council packet.
The water rate increase is a result of the Brazosport Water Authority rate increase of 18 cents per 1,000 gallons, the packet states.
The increase to the sewer treatment and sanitation rates will cover the cost to treat waste and disposal of waste, salary increases, and cost to transport recyclables to Houston for recycling, according to meeting documents. The commercial tree and landscape services disposing of yard waste at the mulch site will increase by $1 to $8 per cubic yard, which is still significantly less than the $14 per cubic yard rate charged at the landfill, the meeting documents state.
The final reading will be at a later meeting.