Future murky for Buda senior tax rate freeze

A $2.3 million decrease in revenue over a decade’s time is how much Buda anticipates losing if it were to implement a proposed freeze on property tax for senior citizens.

While no action was taken on the proposed freeze Oct. 17, city leaders continued discussion and debate over issues involving property taxes.   

Buda Finance Director June Ellis updated city leaders on the impact to the city if a tax freeze were implemented for Buda seniors. The update was the result of a request from Buda council member George Haehn in February.

Haehn originally requested the agenda item to try and make Buda more affordable for residents wanting to grow old in the city, claiming that many seniors can’t afford the rising tax rates.

Ellis highlighted tax exemptions Buda offers to seniors, including Homestead exemptions, which have been offered in Buda since 1990. The city also allows an Over 65 and Disabled Person exemptions.

Ellis said the homestead exemption provides property tax relief at the higher end of one percent of the total assessed value or $5,000 per homestead; Buda currently offers 3,110 homestead exemptions.

The Over 65 and Disabled Person exemption provides a reduction of $35,000 of assessed value each tax year. Buda has 567 Over 65 exemption accounts and 50 Disabled Person exemption accounts.

Ellis said the county adopted a property tax freeze for residents 65 and olders in 2017. The school district has a state mandatory range for residents 65 and older.

However, based on a projected model, implementing a Buda tax freeze for seniors over 65 could eliminate possibly $2.3 million in tax revenue over ten years.

If the council were to adopt and implement a tax freeze, it would be irreversible and there would not be a chance for future councils to amend it, Ellis said.

David Marino, Buda’s public information officer, said the proposal would have frozen the amount a senior citizen paid to the amount paid during the year they turned 65. If a resident were to have made significant changes to their home, then the property would have been re-evaluated at that point.

Buda Mayor Todd Ruge and Councilmember Eileen Altmiller both opposed a possible tax freeze.

They opted to instead to try and offer higher exemption amounts for seniors over 65 and disabled persons and not place the bulk of the tax burden on younger homeowners.

“We really don’t want to do a freeze,” Ruge said. He added that the city wants to give people over 65 and disabled people as many advantages as possible.

“Instead of a freeze I would need a little more certainty like maybe raise the exemptions by $5,000  every year,” Altmiller said.

Haehn, who continued to advocate for the freeze, said seniors in Buda are struggling now and are in need of a tax freeze.

Altmiller countered that if a freeze were implemented, it would negatively impact younger residents who pay school taxes that are raised every year.

“We could really do a lot of things (exemptions, tax freezes) and people’s taxes are still going to go up because the key to this is school financing needs to be readdressed in this state,” Ruge said.

Ruge said it was a delicate subject that a future city council would have to weigh carefully before acting one way or another.

“I think a future council can tackle this daunting task,” Ruge said.

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