Hutto to propose three options for property tax rate increase
The city of Hutto will consider three options to raise its property tax rate because of new state legislation that caps the amount a city can increase its tax rate without voter approval, and also because of the $125 million in bonds approved by Hutto voters in 2018, according to a city news release issued Friday.
The new state law limiting how much a city can raise its tax rate does not go into effect until Jan. 1.
"With this new limitation, we must revise our tax rate appropriately to provide the necessary funding for services like public safety, public works and upgrades to infrastructure needed to keep up with the growth we are experiencing and expecting," Mayor Doug Gaul said in the release.
Michell Sorrell, a Hutto assistant city manager, will present three tax rate options to the City Council, the release said. It did not say when. The City Council will hold public hearings on a proposed tax rate on Aug. 1 and Aug. 15.
The first option Sorrell will present would raise the property tax rate of 51.5 cents per $100 valuation to 61.5 cents per $100 valuation as approved by voters in the November bond election, the release said. It said with this option no additional money for maintenance and operation would be available to cover costs associated with the increase in services.
The increase in services that would not be covered would include staffing at the new justice center approved in the November bond election, said Emily Parks, a city spokeswoman. The justice center is a new police communications facility.
READ: Hutto's $125 million bond proposal headed to November ballot
The second option would set the tax rate at 64 cents per $100 valuation and provide money for additional staffing at the justice center, the release said. It said the third option would be to set the tax rate at 68 cents per $100 valuation which would pay for all necessary staff requests and related vehicles and equipment.
The city cannot set the tax rate above 68 cents per $100 valuation without voter approval.
Under the new state law, known as SB 2, voters must approve property tax collections 3.5% higher than the year before, not including new value on the appraisal rolls.
The $125 million bond package Hutto voters approved in 2018 also includes money for improvements to parks, roads and water utilities. The increased amounts each tax rate proposal would cost the average homeowner in Hutto was not included in the release issued Friday.
The city said on its website in 2018 that if voters approved the $125 million in bonds, it would raise taxes ranging from $70 per year for the owner of a $100,000 home to $175 per year for the owner of a $250,000 home.