Richmond city leaders must be doing something right: No one spoke out during Monday’s public hearing on the proposed tax rate and budget.
Commissioners have informally agreed to keep the tax rate at 69 cents per $100 value, the same rate as last year. They are also considering adopting a $28.3 million spending plan.
Richmond commissioners will formally vote on the proposed tax rate and spending plan on Sept. 16. The proposed tax rate will fund the proposed 2019-20 budget, which includes 4% pay raises for employees, and funding for street projects and $1.1 million toward the second fire station presently under construction.
The proposed spending plan is 1% less than the 2018-19 budget of $28.5 million. Of the $28.3 million, 7% will go toward paying off long-term debt.
The city is required to adopt a budget by the beginning of the fiscal year, which is Oct. 1. The tax rate will go into effect Jan. 1.
In response to a citizen’s comments at the first public hearing on the tax rate, budget planners said the city of Richmond and its tax rate cannot be compared to the city of Sugar Land. Sugar Land levies a much lower tax rate — just over 35 cents per $100 value. However, Richmond was incorporated in 1837 and Sugar Land wasn’t incorporated until 1959 — 122 years later, said Richmond finance director Justin Alderete.
Because of the age difference, Richmond has much more aging infrastructure, he noted. Also, home values in Richmond average around $132,000 and homes in Sugar Land average about $375,000, which generates more property tax revenue for the city.
Alderete said the city of Richmond also has a substantial amount of tax-exempt property — $333,566,642, which affects the tax rate and budget.
The city also offers agriculture exemptions and a $6,000 exemption to residents 65 or older. Altogether, the exemptions amount to $351,962,862. If the city could tax the exempt property, the city could lower its tax rate to around 43 cents per $100 value, on par with the city of Rosenberg, Alderete added.
Alderete said the proposed budget is fiscally conservative. He said the city will fare better if it does not include funding that might not arrive.
For instance, the proposed budget calls for sales tax revenue to remain the same as 2018-19 to provide a financial cushion in case sales tax revenue does not grow as expected. Likewise, the state legislature has capped the amount of taxes a city can impose on property and no longer allows communities to earn franchise tax revenue on telecommunication and cable services.
Commissioner Barry Beard urged citizens to shop in Richmond to help the city’s sales tax revenue grow.