The city will hold a public hearing at 6:30 p.m. Sept. 2, at City Hall to explain a proposed 6.11-mill increase in its ad valorem levy on property in the city limits.
While school taxes have prompted the taxes collected by the city to rise over the past several years, the Houston Board of Aldermen has not raise property taxes. The city has cut services and expenses, even during the worst of the Great Recession, in an effort reduce the economic impact on taxpayers and the community.
In a prepared statement the city has said the increase has been sparked by an increased funding request by the Houston School District and decreased assessed property values following Chickasaw County’s recent reappraisal.
The increase, if the board approves it, will see the city’s millage rate go from 89.95 mills to 96 mills.
The city is holding the line on projected revenues with this year’s projected revenue standing at $2,454,216.96 which is exactly the same as last year. Ad valorem taxes will account for 32.8 percent of next year’s budget, if approved, which is also the same as last year.
The city’s fiscal year begins in September.
The Houston School District has budgeted an approximate 4-percent increase in ad valorem taxes from property owners in the Houston School District this year. Last year’s school assessment was 53.10, up from 49.95 mills the previous year.
Ad valorem taxes are based on the value of homes, automobiles, utilities, rental property, business fixtures and equipment. The city’s other major revenue stream is sales taxes which are also down this year.
A one-mill increase in the Houston School District raised $57,000 based on last year’s tax rolls. A one-mill increase in the City of Houston raises approximately $28,000. A one-mill increase in Chickasaw County raises approximately $90,000.
State law allows school trustees to raise ad valorem taxes 4-percent without a referendum. An increase of more than 4-percent requires the issue to be put to a vote, which must pass by 50-percent, plus one vote.
The ultimate taxing authority rests with the City of Houston Board of Aldermen and the Chickasaw County Board of Supervisors. Those bodies have traditionally approved school district tax increase under the 4-percent threshold.
The law is also rather vague on who has the authority to stop a school tax increase since it also says cities and counties must pass balanced school budgets. Not passing a tax increase could give the school district a budget deficit.