Opinions mixed on Waxahachie's proposed tax rate

Residents are being taxed out of their homes, some say

Chris Roark
Waxahachie Daily Light

As the Waxahachie City Council inches closer to adopting its tax rate for the 2021-22 fiscal year, some residents say that keeping it the same as the current rate isn’t good enough.

The city is proposing a tax rate of $0.66 per $100 valuation, the same rate the council adopted in 2020-21. Of the proposed rate, $0.4811 is for maintenance and operations, which includes $0.025 for the Sims Library. The interest and sinking (I&S) rate, or the debt service rate, is $0.1789.

Mayor Doug Barnes and the Waxahachie City Council discuss the proposed tax rate at Tuesday's meeting.

The City Council dropped the rate from $0.68 to $0.66 in 2020-21 after keeping the rate the same since 2011. The city said the owner of the average-valued property would pay $1,542 in city taxes this year.

The proposed budget is expected to raise $2.9 million more in property taxes, an 11% increase, from last year, city officials said. Of that amount, $1.3 million is from new construction.

During a public hearing Tuesday night residents urged the council to instead adopt the no-new-revenue rate, the rate that would bring in the same revenue as last year, of $0.62588 or get closer to it.

Residents said a steady tax rate still means higher tax bills since property values are climbing.

“How can you continue to increase taxes on individuals and families who are stretched thin, especially now during a pandemic?” asked resident Stacey Bailey.

She encouraged the city to find ways to tighten the budget instead of going forward with the proposed rate.

“I fundamentally disagree with the current system of taxing more to spend more,” Bailey said. “This approach taxes people out of their homes. This has happened and is happening in our community.”

Resident Paul Christenson agreed. He said he took issue with proposed rate, especially after the council recently approved $43 million in certificates of obligation (CO) bonds.

“Issuing certificates of obligation, what you did was take our right as taxpayers away from us because if you had issued general obligation bonds the citizens would have had a right to vote on if they wanted that issue,” Christenson said. “And when I look at many of these items we don’t even want these items.”

Other residents, however, urged the council to stay the course, saying it’s important to consider how services and projects are funded.

“Regardless of what people want to mention here, developers don’t pay every dime for infrastructure that goes to where they go,” resident Chris Wright said. “It has to come from somewhere.”

Council members took different views as well. Councilwoman Melissa Olson said it’s not too late to adopt the no-new-revenue rate.

“We are literally $0.000501 from having to hold an election,” Olson said, referring to the rate of $0.66050 that would trigger an election. “That’s how high our rate is right now.”

Olson added that she supports the proposed budget, but said the city should use leftover money in the general fund to pay for some of the budgeted items, allowing the city to move closer to the no new revenue rate.

Councilman David Hill questioned the suggestion of adopting the no-new-revenue rate this late in the process.

“It’s not too late, obviously, we can do anything we choose to do,” Hill said. “But the fact is that everyone was in on the same conversations, the same workshops for hours and hours and hours.”

Hill also cautioned what the financial impact to the city would be by lowering the rate.

“If we lower one penny on our sales tax that’s $420,000 that goes toward running the city of Waxahachie,” Hill said. “Three cents is $1.2 million, four cents is $1.6 million.”

He also disputed the idea of using general fund reserves too much so that the rate can be lowered.

“Even with a $14 million reserve in our general fund we have other projects in the city — infrastructure-wise, broadband and things like that — where funds have been set aside,” Hill said. “So it’s not like you look at the balance in your checkbook and spend what’s left each week.”

The council is set to vote on the tax rate and the budget at 7 p.m. Tuesday at City Hall.