Marble Falls residents could see higher tax bill; homestead exemption for elderly is the ’cause,’ mayor says
MARBLE FALLS — The City Council is considering a tax increase for the 2012-2013 fiscal year, with some blaming the hike on a homestead exemption that froze seniors’ taxes a few years ago.
The council voted 3-2 during its Aug. 7 meeting to consider a proposed rate of .6483 cents per $100 valuation for the upcoming fiscal year. The current rate is set at .6435 cents per $100 valuation.
A $50,000 homestead-tax exemption approved a few years ago by voters for disabled residents and seniors 65 and older that froze their taxes is the reason for the increase, said Mayor George Russell.
“We had enough people qualify for that major exemption over new businesses coming in to cause this,” he said. “It puts a burden on the rest of the population.”
Because the new figure affects the effective tax rate — what the city has to bring in to equal the 2011-2012 rate — and isn’t an increase under state law, the council doesn’t have to hold public hearings before adopting it, officials said.
“If you go with the effective tax rate, it wouldn’t be considered a tax rate increase,” said Margie Cardenas, city director of finance.
The council will hold two more readings on the adoption of the effective rate, then vote on the measure Sept. 18.
Under the proposed tax rate, a home valued at $200,000 would see a tax bill increase of about $10 over the 2011-2012 rate, while a home valued at $100,000 would see the tax bill increase about $5.
The proposed rate under consideration by the council is equal to the city’s effective rate.
The effective rate typically actually comes in slightly lower than the current rate.
“But our effective rate is slightly higher than our current tax rate,” she said. “One reason for this is our valuations have decreased.”
Cardenas said the 65-and-older exemptions cut $600,000 off the city’s valuation.
“This is going to look like a tax increase, but we didn’t do it,” said Russell, who is over 65. “The exemption that was voted in forced the rate up.”
Russell and council members John Packer and Sharon Pittard voted for the proposed rate while council members Reed Norman and Jane Marie Hurst opposed it.
Norman indicated he preferred carrying the 2011-2012 rate into next year.
Councilman Ryan Nash and Richard Lewis were not at the meeting.
Voters in May 2010 overwhelmingly approved a $50,000 homestead tax exemption for those 65 and older, as well as the disabled.
Organizers who collected enough signatures for a petition to put the issue on the ballot said the exemption was needed after the council raised property taxes by 28 percent in 2008.