PFLUGERVILLE, Texas (KXAN) — Cities across central Texas are considering taking advantage of an 8% property tax revenue cap, instead of the normal 3.5% cap.
Senate Bill 2, which went into effect in January, would require a city to put increasing the 3.5% cap to a vote, this doesn’t apply during a disaster declaration.
The City of Austin has said it won’t be increasing its revenue cap, however, Kyle and San Marcos are, and now you can add the City of Pflugerville to the list.
“I don’t see any reason why we need to go to 8%. It’s against the law, in my opinion,” said Pflugerville Resident, Anthony Nguyen. “The city has not taken a cut because of COVID-19. We have actually exceeded expectations. We are building a new Amazon facility here.”
The City of Pflugerville wrote in its FY2021 budget report that the economic impact of the pandemic to the city has been ‘Manageable Thus Far.’
“Through these challenging times, the City has continued to experience rapid population growth and a strong economy as evidenced by the increase in property values, continued residential construction, and expansion of commercial business development,” according to the City of Pflugerville’s FY21 budget report.
During a July 14. City Council meeting, the potential revenue cap was up for discussion.
“Tuesday’s move was to prepare calculations based on 8% which in effect would lower the property tax rate, which over the years has been our goal,” said Victor Gonzales, Pflugerville Mayor. “We are still looking at this in preparation for our final vote in August. Nothing is set in stone yet, although you will hear a lot of chatter about this on social media.”
Pflugerville’s City Council voted 4 to 3 to begin preparing calculations based on the 8%.
“The financial director and I find it prudent to raise the 3.5% cap to the 8% cap as a precautionary measure,” said Pflugerville City Manager Sereniah Breland. “Either way, at 3.5% and 8%, you will see a decrease in the overall property tax rate.”
Pflugerville’s City Manager says this move doesn’t mean the city is requesting an increase in the tax rate.
In fact, the city has proposed reducing the overall property tax rate very slightly, making the bill for the average home virtually the same.
The revenue generated from the property tax goes towards maintenance cost. That funds things like police services, parks and recreation, the library or other development.
“The difference between a 3.5% and an 8%, voter approved rate, is approximately $850,000. If you look at our budget, that’s the cost of the unfunded traffic signal takeover,” said Breland.
If approved, the tax would go into effect for the 2020 fiscal year.
“If they want to go to 8%, then that’s fine, call the election,” said Nguyen.
Pflugerville City Council will hold a public hearing during its August 11 meeting to discuss the cap further.