In his latest blog post, Mayor Friedberg discusses some common misconceptions about a proposed tax rate increase for Bellaire.
The Mayor states that “probably the most prevalent misconception I’ve encountered is the notion that we’re looking at a 25% tax hike over the next five (some are saying three) years. Not so. The only proposal on the table—or that even could be on the table since we budget one year at a time—is for just the upcoming year. What does cover a five-year time period, likely the source of this misconception, is our fiscal forecast, which illustrates using conservative assumptions how the math simply doesn’t work over the next several years and that something’s gonna have to give. To reverse that trend, the City Manager is recommending an 8% revenue increase next year to reestablish a healthy reserve going into a revenue-constrained future. What happens beyond next year remains to be seen, a lot of variables could affect that, and the City Manager hasn’t proposed any future tax rates at this point.”
He addresses concerns about how the tax increase affects HCAD appraisal increases. He explains that “Some have expressed concern that a city tax increase would represent a double whammy on top of expected HCAD valuation increases. That after their HCAD appraisal goes up 10% (for capped accounts), they’re going to be hit by another 8% from the City. However, that’s not really how it works; it’s inclusive, not additive. A city tax increase refers to the total taxes collected by the City year over year from the same properties taxed in both years. It does not necessarily mean that the tax rate itself increases, as the rate is a function of aggregate appraisals. So in any year our total taxable value rises, the nominal tax rate necessary to generate a given amount of revenue actually falls. It can be a bit complicated and hard to explain, but the basic point here is that increases in appraised values are already factored into the equation, and that also means the proposed 8% revenue increase does not simply translate to an 8% rate increase.”
The Mayor welcomes citizen input on the proposed budget and tax increase an hopes that residents will attend the next Public Hearing August 12 to express their concerns.
See the Mayor’s full blog post HERE.
