|Rollback: Is it really a good idea? |
by Crystal Gottfried, Staff Writer
County Commissioners are already working on the worst-case scenario if taxpayers vote on May 13 to roll back the two-cent tax rate increase.
In order to put money back into county reserves and to balance the budget for 2006, commissioners raised the tax rate two cents, an increase in the effective tax rate of more than 12 percent.
The effective tax rate is the level that would produce the same revenue as in the previous year. State law allows voters to petition for a rollback election to set the tax rate at 8 percent above the effective rate.
Such a petition was submitted to the Commissioners Court, forcing a rollback election that is scheduled for May 7.
If voters pass the rollback measure, the new rate would be reduced by one penny. That means a taxpayer would be entitled to a refund of less than $8.00 on a home with a taxable value of $100,000. It would also force the county to cut about $600,000 from its $37.5 million budget for 2006.
As would be expected, county commissioners are disappointed that some taxpayers organized a successful petition drive that received more than the 4,553 signatures required.
"We can't hurt the progress that this great county has made over the years," said 1st Precinct Commissioner Jack Dawson. "I would like the county citizens to understand the reasons why we went over the effective tax rate of 8 percent.
"The rollback election is addressing nine-tenths of one penny, and that is less than what would cover the overages that the county has paid out of the general fund," he added.
Comal County Judge Danny Scheel said that commissioners just want to make sure that the people understand how this rollback election, if it is passed, will affect the county's bond rating as well as the services that the county provides.
"We didn't raise the taxes to undermine the voters or the public," Scheel said. "We did it only because of the extra funds that the county lost in revenues and to prepare for the influx of new residents expected in the next couple of years."
Scheel added that many people who signed the rollback petition were not properly informed about both sides of the rollback and what it means for the county's future.
"Many people signed the rollback petition because they were tired of their school taxes going up every year," he said.
Scheel said he was surprised by that kind of thinking because taxpayers voted to approve a $157 million bond issue for the Comal Independent School District in December to handle recent and future growth in county schools.
According to the Comal County Auditor David Renken, in recent years Commissioners' Court elected to balance the budget by budgeting reserves, because of their concern for taxpayers and their desire to keep the tax rate as low as possible.
County officials contend that, in 2006, it became necessary to raise the tax rate 2 cents because of the need to rebuild reserves and fund necessary services that come to the county in the form of federal and state mandates.
The County's reserves have declined due to substantial population growth, inflation, increases in health, liability and hazard insurance costs, the increased costs of unfunded mandates such as indigent health care and indigent defense, and cleanup from recent significant flooding events, and the unexpected loss of nearly $700,000 in Immigration and Naturalization Service jail revenues.
Comal County continues to grow rapidly, and this growth generates just enough additional funding to pay for the additional services such as sheriff's deputies, roads, the courts, health department and indigent health care that are required by these new residents.
It takes 18 to 24 months for improvements and new homes to show up on the appraisal rolls and then be taxed. In the meantime, new residents require additional services immediately.
The county must already incur the expenses associated with the election, but if the rollback is passed, the county will also lose approximately $600,000 in revenue. This would have a significant impact on the county's bond rating, translating into a 0.25 to 0.5 percent increase in the county's cost to borrow money.
The county has approximately $30 million in necessary projects planned in the next few years, such as the courthouse restoration, the courthouse annex renovation, a new tax office, the Dry Comal flood structure, and the Hwy. 46 and Hwy. 281 road projects.
If the county must assume a 0.25 percent increase in the interest rate, because of the bond rating, the additional interest expense would be about $1.6 million for this $30 million over 30 years and with a 0.5 percent increase it could cost county taxpayers an additional $3.2 million.
"Salaries for our employees are lower than other counties in the state and even in the private sector," said Scheel. "We want our county employees, including law enforcement, to be paid a salary that stays competitive. They do an excellent job for our constituency and they deserve it."
That's not the worst of it for officials and taxpayers, who would like to keep their county services at current levels or better.
Satellite services at the county's branch offices in Canyon Lake and Bulverde may have to be cut-back.
Comal County Sheriff Bob Holder wants to keep law enforcement services as they are.
"We run our patrol cars up to about 130,000 miles before they need to be traded in for newer models," Holder said. "If we run them beyond that, then we're looking at mechanical and safety problems."
If the county is forced to roll back the tax rate, the sheriff's office may have to do without the 18 new cars that they currently need.
"I think the rollback petition organizers are making a mountain out of a molehill," said Holder. "I will stand with the commissioners on this issue because we're talking about the effect this rollback will have on county employees and our citizens. I encourage people not to roll it back."
The County Road Department may lose part or all of its budgeted request for new trucks, and that may translate into a longer wait time for road repairs and improvements.
Jan Kennady, 4th Precinct Commissioner, said that the court knows for a fact that some people who signed the petition for the rollback thought they were forcing a roll back of all taxes, not just county taxes.
"Comal County is one out of only a few counties that have the homestead exemption, and nearly 1,200 citizens who signed the petition will not receive a rollback refund," Kennady said. "However, the rollback may negatively affect the services they now receive."
Comal County had a successful over-65 and disabled tax freeze election in 2005, so the 2006 tax increase and rollback election would have no effect on those who are 65 or over, or disabled, and who filed for the exemption.
County officials are still talking with people about the 2006 budget as much now as when they asked for public input before its adoption last fall.
"The biggest challenge we now face is how to help people understand how passage of the rollback will affect the county and its citizens down the road," said Kennady.
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