By Moses Leos III
Kyle citizens spoke out loud and clear against a proposed seven-cent property tax rate increase during the city’s first public hearing in the possible increase.
But some city council members believed raising the tax rate is the only way for Kyle to manage its increasing debt.
“Some people may think it’s irresponsible to raise the tax rate,” council member Damon Fogley said on the dais on Aug. 19. “I see it as being responsible as it’s addressing that debt service (the city has) right now.”
The seven cent increase is part of the city’s proposed $78.8 million budget for fiscal year 2016.
Those seven cents, however, will go toward paying debt service. Kyle is due to pay $8.29 million in debt service in FY 16, which is a 37.8 percent increase from 2015.
That added debt is driven by the city’s 2014 issuance of the final $30 million in GO Bonds for the $36 million road bond initiative.
Mayor Todd Webster said several factors went into moving up the projects. One of those was to take advantage of a low interest rate.
And the primary reason for moving up the projects fast was to meet the demand of citizens.
“I hear about it every day online and in emails. People want those five roads they voted on built, and built quickly,” Webster said. “It’s the more cost effective approach. And while there is a spike in tax rate increase, it will save the taxpayers money.”
But several citizens disagreed that increasing the tax rate was the right way to go.
One citizen who lives in Plum Creek said that Kyle’s population “can’t support” a property tax rate increase. The citizen added that Kyle isn’t “Westlake or anything like that” and that citizens are “normal people that just make normal wages.”
Kyle citizen Maddie Welch, who lives on a fixed income, asked council if there was another way for the city to raise funds “than to tax people out of their homes?”
“When the tax rate goes up, I have to take away from my groceries, my medicine and my taxes,” Welch said, who later added, “Somehow, some way, there are other ways to get the money other than raising taxes.”
A Kyle area landlord and realtor said many prospective homeowners are affected by the city’s tax rate.
She said tenants can no longer afford to lease homes in Kyle as homeowners must increase rents to accommodate the higher tax rate.
“You’re making home ownership more difficult and you’re forcing people into apartments,” the citizen said.
She added her concern that the increase in tax rate, along with the increase in property values, would be too much for some.
When compared to the effective tax rate of .4870 per $100 valuation, Kyle’s proposed tax rate would guarantee a 26% increase in total tax revenue, based on tax rolls from the preceding year.
A Kyle resident asked what was the point of the city’s growth if “it’s causing people … to not afford their homes.”
But she had issues with the city assessing a tax rate increase to go along with the rise in property values. According to city officials, however, Kyle would have to cut $1.6 million from the budget if the city opted to eliminate a tax rate increase.
“There are hundreds of homes and new businesses. At the same time, you want to charge more and there’s property value increases, and you want to charge more,” the resident said. “Right now, it seems like greed. The property values are huge, and we’re going to have a property tax increase at the same time.”
With citizens wanting a lower proposed tax rate, the city would have to cut items to balance its budget. Both Fogley and council member Daphne Tenorio asked citizens what they would want in – or cut out of – the budget.
“I live on a fixed income because I’m a stay-at-home mom. I have to live on my budget. My family didn’t get a 26 percent pay raise,” Tenorio said. “This a big deal. I empathize with all of you … tell us what’s important to you.”
