City leaders set to vote on tax hike; First reading of proposed $47.8M budget

HARLINGEN — The voting is about to begin.

Late today, city commissioners are set to vote on the first reading of an ordinance approving a proposed $47.8 million general fund budget to come with what officials call the first property tax increase in 14 years.

Commissioners are expected to cast their second and final vote on at their Sept. 18 meeting.

The proposed 4-cent tax hike would boost the city’s property tax rate from a little more than 58.8 cents to 63 cents per $100 valuation to generate about $1.3 million a year, balancing the proposed budget.

So far, Commissioner Frank Puente has stood as the Commission’s lone voice against the tax hike.

Meanwhile, last month residents spoke out at two public hearings, bitterly opposing the proposed tax increase.

On tonight’s agenda, residents’ public comment period is set to be held at the end of the meeting, as it has for about five years.

At City Hall, officials claim the tax hike will generate money to help fund drainage upgrades.

Senate Bill 2

But many residents believe officials are pushing for the tax hike before new legislation takes effect requiring cities to call elections to decide if they can raise tax revenue higher than 3.5 percent.

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.

Cash reserves

Meanwhile, Puente is calling on commissioners to dip into the city’s $17.5 million cash reserves to help fund the drainage projects.

But officials say they already plan to dip into cash reserves to help fund some of the proposed expenses.

To help fund the drainage projects, officials plan 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.

Drainage projects

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, Assistant City Manager Carlos Sanchez has said.

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.