Thursday, August 20, 2009

Budget Question (updated)

The City government is in the middle of its annual budget process and this one continues the tradition of a long, drawn out affair that is entertaining to some political junkies. It looks like the final tax rate will be down by about $.005 per hundred after all the smoke clears, which will still leave us with one of the highest tax rates in the state of Texas (Ft. Worth is still ahead of us, not sure if anyone else is.) The city website has the proposed budget online, and it is full of good information such as 52% of the budget is for public safety, and 74% of the city government expenditures are for personnel. You can go through the 50 pages and quibble about this expenditure and that revenue source and who should pay for utilities at the golf course, but we really need to get to the most fundamental question to be answered for taxpayers and stakeholders of San Angelo. San Angelo's property tax rate is currently $.8275 per $100 (about a $.04 in the last 4 years.) Compare this to $.6854 for Abilene, $.4464 for Lubbock, $.4859 for Midland, $.56229 for Odessa, and $.65 for Victoria. Forget about Tyler, which has a tax rate of $.204. The question that needs to be answered is “Why is our tax rate in the top 5 Texas wide?”

I have some ideas, but I am waiting for answers.

An updated P.S. When you add in the storm water fee, it gets even worse. When you look at the impact on the local economy and community, every dollar of revenue the city collects whether it's sales tax, property tax, a permit fee, utility fee, etc. it amounts to a tax. This new storm water fee is no different. Using the numbers I have heard at the last few council meetings during the budget discussions, a one cent difference in the property tax rate is about $330,000. They tell us the new storm water fee must collect $2.9million so we can meet federal mandates. That is equivalent to about an 8.8 cent increase in the property tax rate. I'm sure it's necessary. I know there are not a lot of choices out there, but this amounts to pretty much the same as an over 10% increase in city property taxes on property owners in San Angelo. When we include the storm water requirements in the total tax bill we could well be the highest taxed city in the state. Do we really want to be number one?


  1. I think a lot of us who have moved here due to the military would like to know why the property taxes are so high compared to other areas of the state. Despite that, it is still reasonably affordable to live here.

  2. The tax rate, of itself, is not so important. Appraisals have to be taken into account. The pertinent figure is the per capita tax burden: the total city revenue less visitor taxes divided by the city's population. How does San Angelo compare in this regard to other Texas cities?

  3. Anon 7:22
    You are really confusing the issue a bit. Our property tax, which is among the highest, is not collected from visitors. Same for the proposed storm water fee. Our other taxes, such as sales, hotel, etc. are pretty much at the legal maximum, as they are in most of the cities in Texas. When you do the calculations that you suggest we still end up with a significantly higher tax load than most cities. And yes, the tax rate is important. That is one of the many expense factors businesses moving here or expanding here take into consideration. Handouts and incentives from SADC don't mean much if they get eaten up by a higher tax rate.

    Remember, the question was not if it was higher (which it is) or how much it is higher (which is significant) but why is it higher.

    Our city officials need to tell us three things. First, are our local property values that much less than comparable cities? Are we paying more for the basics that every city has to pay for (and if so why?) Are we buying a lot of extras that other cities aren't.

    This answer must come from the city government, not speculation or calculations on a blog.

  4. Taxes paid by visitors are Hotel and Motel taxes and roughly 2-4% of sales tax. The TOTAL tax burden per capita for San Angelo citizens is the total revenue (ad valoreem tax, sales tax, utilites, fines, et al) less that paid by visitors. The portion born by visitors is probably small enough that it could be ignored. My point is that the tax RATE is not important because it is meaningless without appraised valuation and the total tax burden reveals the cost imposed on residents which can be compared to the value of services delivered by the city government.

  5. The portion of taxes paid by visitors is probably close enough percentage wise to be a wash.

    Did a couple quick calculations getting budget data from some of our benchmark cities. Took total budget revenues and divided by total population. So far the spread is San Angelo is from 1.2 to 1.3 times higher on the tax per. There will be differences because of age of census data and some budgeting differences, but our city has been higher on all of the ones I have checked so far.

    Question still remains.

  6. If your benchmark cities are roughly the same population as San Angelo (eliminating economy of scale) and deliver roughly the same services, it can be concluded that the San Angelo city government is very inefficient.

  7. Continued on and did some more cities. Did the standard benchmark cities we frequently use of Abilene, Amarillo, Lubbock, Midland, and Odessa. Odessa was a statistical tie, the rest were 9% to 30% higher. Some might be inefficiencies. Some might be extra (necessary or unnecessary) expenses other cities don't have. Take your pick.

    There are lots of ways the numbers can be looked at. We haven't thrown in the average or median income to get taxes as a percentage of income. We don't want to make the picture look even worse.

    Doesn't change the original question.

  8. Worth a note: as legally required city has published a "Notice of Public Hearing on Tax Increase" (it's on the opening page of city's website). Hearings will be Sept. 1 and Sept. 15, both at 9:00 AM. A convenient time for working folk.

    Maybe, by then we will be discussing at least a half cent reduction.

  9. Hey Jim I agree with your estimation! If elected Mayor, I will encourage the Council and myself to have a meeting with the members of the appraisal district and give them some direction of where the Council disires to go. The Council and the Mayor appoint a representive on this board and we need to hold him accountable. If taxes go up 13% across the board, we need as a council to adjust the tax rate according to the increase. The way the Council does it now, is if they collect more taxes because of the reaevalueation, they just look for a way to spend it.
    I don't think that's what we do with our own money at home. I will be very firm on this issue.
    Daniel Cardenas

  10. Here's a thought to our tax issues!

    Get the appraiser office off their asses! No one has bothered to keep up to date with assessments around here. Here is an example. 208 S Park

    1st view this page.

    NOW, view the listing. It's for sale


  11. Anon of 9/20; I couldn't agree more. Our problem here is that city does not controll Appraisal District. Every taxing entity in the county gets one rep on Appraisal Board, which quite jealosly protects its "turf". Veribest ISD, Water Valley, Grape Creek, Christoval, Wall, even the Quail Valley Municipal Utility District, (BTW, did anyone consider that MUD was a poor choice of acronym for a water utility?), County, and of course the big dog, SAISD, each has one rep on committee.

    Brother Caredenas may well be on to something. Though Council cannot direct the Appraisal District, they and staff certainly should start taking into account increases in appraised value of properties. On the receiving end, for the taxpayer, it amounts to a larger check to write, an effective tax increase, regardless of who is responsible.

  12. That house on S park is appraised at $685,000 and it's up for sale at $3.2m????? It must be nice to slide by with an 11K tax bill on a home "worth" 5times the appraised value???? I've seen this home and in my opinion it might be worth 1.2-1.5 MAYBE. It's not a 3million dollar home sitting next to a used car lot. But it DOES need an appointment with the tax appraiser.