The city council criticized an increased preliminary tax levy introduced by mayor Jose “Joey” Torres’ administration while demanding the administration either maintain the current level of expenditures or reduce expenses on Wednesday night.
The preliminary tax levy increases the tax rate to 4.359-percent from 4.108. An average home assessed at $192,500 is expected to pay $8,391 in taxes in calendar year 2016 compared to $7,912 in 2015, according to presentation the administration made to the city council.
“Higher rate, higher taxes,” said Kenneth Morris, councilman at-large, chairman of the finance committee.
“We have to make the difference of the county, school, and open space taxes,” said business administrator Nellie Pou.
Morris recognized the city cannot control the school or the county taxes, but noted the rate for the municipal portion increased to 2.802-percent this calendar year from 2.640.
Pou explained the calendar year covers half of the last fiscal year which ended on June 30th, 2016 and half of the current year which began on July 1st, 2016. She said the preliminary $161.2 million levy translate to less taxes for the next two quarters of the 2016 calendar year.
Taxpayers shelled out $83.9 million in the first and second quarters of 2016. In the third and fourth quarters the city will raise $77.3 million, said the business administrator. “The third and fourth quarters will be less than first and second,” she said.
Morris said however way the administration explains it the rate is increasing which will increase taxes. He suggested the administration over estimated the tax bills for the first and second quarters which will likely result in the ostensible discount.
Pou suggested the city has to make up $5 million in “artificial cuts” the council made last year.
“You can’t make up what you spent last year,” said Pou. “I can’t take that money back.”
“The reason these bills increased is because there was no reductions made,” said Morris. He said the administration is not going to be recouping the $5 million this year. “When we said reduce the budget, reduce the budget. You can’t layer back the $5 million we cut.”
“They didn’t believe we were serious,” added council president William McKoy. “The taxpayers are at their limit.”
McKoy said the administration needs to provide a better explanation for increasing the taxes. He said he wants to see alternatives to repeated tax increases. “I don’t hear a layoff plan, I don’t hear ‘turn the lights down,’ I don’t hear anything,” said the council president.
“We’re going to have to get ready for a real reduction,” added Alex Mendez, councilman at-large.
Council members said the administration needs to make budget cuts early on in the fiscal year to avoid tax shocks down the road as has happened last fiscal year.
The budget tussle between the council and the administration last year resulted in the mayor shutting down city government for a day.
Luis Velez, 5th Ward councilman, said he would not support any type of tax increases. Without the council’s approval on the preliminary tax levy the administration will not be able to send out the August tax bills, said the business administrator.
“We have to strike it now to send out the tax bills,” said Pou of the preliminary levy.
“We’re not striking it at that rate,” responded McKoy.
Ruby Cotton, 4th Ward councilwoman, said homeowners are tired of receiving late tax bills.
“If we thought this was going to be the same casual conversation — that we’d pass this and work on it later it’s not happening,” said McKoy.