Horseshoe Bay Mayor Cynthia Clinesmith addresses attendees of a City Council meeting as Councilor Elsie Thurman listens. File photo
The Horseshoe Bay City Council voted to approve an interim maximum tax rate of 0.28261 cents per $100 valuation for the 2021-22 fiscal year during its regular meeting July 20. That’s up from the current rate of 0.27 cents per $100 valuation.
But not to worry, Mayor Cynthia Clinesmith said.
“Our tax rate is anticipated to be the same,” she said. “Most cities have cost increases. Our tax rate is 0.27 cents (per $100 taxable valuation); our peak is 0.28261. We set it at that in case there’s an emergency order, but I can’t think of a year where we didn’t go back to where we intended.”
When the council votes on the tax rate again in the coming weeks, Clinesmith expects it to drop back to the current 0.27 cents. City staff noted this vote is cautionary until final appraisals are provided to the city from the Llano Central Appraisal District.
“Staff builds a budget based on evaluations,” Clinesmith said.
Home values have recently risen, so city leaders don’t expect a tax increase will be needed to bring in the budget amount for the new fiscal year. That rate will be set in September.
Clinesmith, a former school superintendent, spoke from personal experience in why setting the rate too low at the beginning of the budget process could have consequences later.
“Once (the school district) got our final numbers, if they didn’t mesh (with projections), we had to lay off staff,” she said.
The council also approved a special election on Nov. 2 so residents could vote on two propositions:
allowing the city to continue to collect sales tax for street maintenance, which is done every four years;
and collecting an additional 0.25 percent in sales tax for general revenue.
Clinesmith noted the importance of the 0.25 percent sales tax for general revenue, something the city didn’t begin collecting until the state law changed in 2015.
“It doesn’t have anything to do with property tax,” she said. “The more we can get from sales tax helps offset what we need to do. We’ve been taking less. Now that they’re allowing us to use it, that’s $200,000. It would be silly for us to leave that money on the table.”
Three City Council members are seeking re-election in the November election: Mayor Clinesmith and councilors Randy Rives and Frank Hosea.