HARLINGEN — Residents last night claimed city officials are pushing for a 4-cent tax hike months before a new law requires the city to call an election to allow citizens to decide if it can raise taxes by more than 3.5 percent.
It was the second of two public hearings into the City Commission’s plan to boost the tax rate from a little more than 58.8 cents to 63 cents per $100 valuation to balance a proposed $47.8 million general fund budget.
Officials argue the 4-cent increase would generate about $1.3 million to fund drainage improvements after the June 24 storm pushed floodwaters into many homes here.
But some residents didn’t buy the argument.
“You’re trying to beat the clock,” J.V. Garcia told commissioners, noting the new law takes effect Jan. 1.
Earlier this year, lawmakers passed Senate Bill 2 requiring cities and other taxing entities to hold elections to allow voters to decide if the governments could raise tax revenue by 3.5 percent more than they collected the previous year.
Now, the state allows these taxing entities to collect as much as 8 percent more in annual tax revenue before requiring them to hold elections.
At City Hall, City Manager Dan Serna projects Senate Bill 2 will lead the city to lose about $4.3 million during a five-year period after the law kicks in during fiscal year 2020-2021.
“Let’s be transparent,” Garcia told commissioners. “I don’t think it would be a big deal if it was going to drainage. We just suffered one of the greatest floods in the history of Harlingen. We have many residents displaced from their homes. You’re raising taxes on homes that are vacant.”
Like Garcia, Charles Bickley claimed commissioners were trying to push the tax hike before the law takes effect.
“This is the last chance for you guys to take money out of our pocket,” he said. “This is going on throughout the whole state so you’re not the only greedy commissioners.”
Former Commissioner Robert Leftwich also wasn’t buying the argument the proposed tax hike would fund drainage upgrades.
“In past years, we had similar expenses on drainage,” Leftwich told commissioners.
Last year, he said, officials ranked drainage upgrades as seventh on their priority list.
Meanwhile, Cameron County commissioners weren’t calling for a tax hike to fund their drainage projects, Leftwich said.
Leftwich said commissioners should fund drainage improvements through the $4.4 million coming from the city’s Economic Development Corporation’s sale of its share of the University Center to Texas State Technical College.
Like Commissioner Frank Puente, resident Ron Lozano argued commissioners should dip into the city’s $17.5 million cash reserve rather than boost the tax rate.
However, former Commissioner Jay Meade opposed the proposal to dip into cash reserves to fund drainage projects.
“This is our city money and I think decreasing reserves is a bad deal,” Meade told commissioners as he took the podium.
At City Hall, officials claim they’re already planning to use cash reserves to help fund drainage projects.
Serna has said he plans to cut the city’s $17.5 million cash reserve fund, capable of operating the city for about 135 days, to $15.1 million, enough to run operations for about 91 days.
From the podium, Steve Jennings, a Combes resident who said he owns property here, told commissioners the tax rate has climbed since he moved to town.
If commissioners go ahead with their plan to raise taxes, he said, the money should go into street repairs.
“Streets are not as good in Harlingen as they were when I came here,” Jennings said. “Let’s make good use of the dollars.”
Despite the opposition, Meade stood up for commissioners’ plan to raise taxes for the first time in 14 years.
For owners of $100,000 homes, the proposed increase would add $40 to their annual tax bills, Meade said.
“It’s a small price to pay,” he said, referring to maintaining the city’s level of service.
“We have a low rate — one of the lowest for our size,” Meade said of the city’s tax rate. “It will go to drainage improvements. What’s wrong with that?”
Earlier this month, commissioners agreed to fund $1.6 million of a $2.7 million drainage project while the state finances about $1.2 million.
The project will help to curb flooding in the area along Ninth Street from Jackson Avenue to Pierce Avenue and 13th Street from Tyler Avenue to Pierce Avenue.
Meanwhile, commissioners also earmarked $100,550 to widen a drainage ditch running along 13th Street in an area between Matz and Montezuma roads.
Commissioners also agreed to set aside $342,194 to widen a drainage ditch running between Lincoln Avenue and Dixieland Road.
As part of the city’s proposed budget, Serna is calling for one-time capital improvements including $390,000 for nine police cars, $128,166 to fund fire department equipment including 12 air packs, $87,000 for a bucket truck, $320,000 for an emergency generator for City Hall and $163,800 to fund the public library’s elevator control.