By Cyndy Slovak-Barton

Entities throughout the state are printing local property tax rate notifications in their local newspapers.

But where exactly does a taxpayer’s taxes go?

By and large, the largest portion in most cases, especially in northern Hays County, goes to the school district. Then, a taxpayer’s city, county, road district and water district divvy up the rest.

Locally, with so many small towns, that means a variety of different entities. And, being in a high growth area, each entity has a portion of its tax going toward two funds. One is the Interest and Sinking fund (I&S), which includes the paying off of indebtedness that taxpayers voted in on bonds. The second goes toward the Maintenance and Operations fund (M&O), which pays for daily running of the school district, city or other governmental entity.

Part of a city’s M&O pays for such services as parks, libraries, public safety and other departments. The I&S pays off the debt accrued by the city.

Kyle Tax Changes

In Kyle, the city currently has an indebtedness of $96.9 million. That includes the $36 million bond package that taxpayers approved in 2013. Those bonds will be used for five major thoroughfares – Bunton Creek Road, North Burleson Road, Goforth Road, Lehman Road and Marketplace Avenue. Prior to Tuesday’s Kyle City Council meeting, the city’s proposed ad valorem tax rate was $0.6145. The I&S portion would be $0.35 of every tax dollar paid by residents, while the M&O portion would have been $0.2645. 

City leaders said they were able to keep a portion of voter approved I&S taxes down because they reduced the amount significantly. Voters had approved the 2013 bond package for up to $.22. 

The city’s past debt included $30 million for FM 1626 expansion, $31 million for city water and wastewater infrastructure improvements, a new Kyle Public library, new city hall, public works building and much more.

Hearings on Kyle’s budget and tax rate have been rather raucous, with residents speaking for and against certain items in the budget.

But by a 6-1 vote Tuesday, the Kyle City Council opted to lower its property tax rate to $.5848 on first reading. City council member Daphne Tenorio voted against the tax rate. 

Kyle City Manager Scott Sellers said the city’s I&S rate wouldn’t shift, but the M&O rate would decrease to .2306. Sellers said the city’s projected increase in property values would offset the reduction and allow for the funding of operations. 

Sellers said that staff presented a budget that was “addressing current needs, future growth and also prior shortfalls.” 

He said council’s role was “fulfilled” in balancing the needs of the organization with the community. He said the tax rate is a “great compromise.” 

Looking at Kyle’s average home, valued at $155,000, the annual tax bill for the city’s portion only with the tax rate as changed Tuesday would be around $906.

Kyle’s proposed new budget proposes hiring 24.5 full-time equivalent (FTE) positions and reducing three positions, eventually coming in around 22.5 employees. But Kyle Mayor Todd Webster added an amendment calling for four new Kyle Police officer positions and two new vehicles, totaling $430,000. 

The city council approved its amended budget by a 5-2 vote Tuesday. Tenorio and council member Diane Hervol cast the dissenting votes. The second and final reading on the budget is scheduled for Sept. 8. 

Buda Tax Changes

By contrast, the city of Buda is proposing a tax rate of $.3475, which includes $.2298 for I&S and $.1177 for M&O. When looking at proposed city tax rates, Buda has the second lowest rate of nine cities in the region, with only Dripping Springs having a lower tax rate. The city compared itself to Leander, Kyle, San Marcos, Hutto, Pflugerville, Cedar Park, Round Rock and Dripping Springs.

In Buda’s budget, the city plans to pay down $2,712,317 in bond debt in 2015-16. Of that amount, $1,604,951 is the debt related to the bond program that voters approved in November 2014. Buda’s proposed total budget for Fiscal Year 2015-2016 is $29,211,066, with $23,455,016 in expenses and $6,135,543 in capital project expenditures, which doesn’t include bond projects.

A majority of Buda’s projects in the budget involve water. Buda is working to get a firm water supply for its growing population. Besides working on a plan with the Guadalupe Blanco River Authority, San Marcos and Kyle for an interim water supply, Buda is also completing its Westside water well. Other projects include continued expansion of its trails and sidewalk plans, working on community development, doing an affordable housing study and putting together a long range plan for its new library.

Buda’s total indebtedness at this time is $47,510,122.

Both cities’ fiscal years begin Oct. 1. Buda will hold two meetings for adoption of its  tax rate, on Sept. 15 and Sept. 18. In Buda, hearings have brought out no commenters. A long presentation by Buda City Manager Kenneth Williams Tuesday night, in which he itemized various highlights of the budget, drew few questions from the council and no comments from residents.

Buda’s budget includes adding a few new positions, including a police captain position and a police clerk, a public information officer, an additional building official,  a purchasing manager and library youth coordinator.

Right now the city of Buda has 77 employees.

Both cities have worked on the budget over many months, with workshops, council meetings, staff meetings and public input.

“The staff has worked very hard, very diligently,” Buda City Manager Kenneth Williams said. Looking around at the staff  members at council chambers, he added, “They look tired right now.”