Palestine residents might be seeing some property tax relief this year – if their property value hasn't been significantly raised, that is.
Council members voted unanimously Monday to adopt the effective tax rate, lowering taxes by .01 cent per $100 of property value over last year's taxes.
The rate, .681 cents per $100 means taxes on property valued at $50,000 will be slightly over $340. Last year, owners of property of the same value paid $346.
Although facing budget shortfalls, massive street repairs, a crumbling water system, and infrastructure projects totaling in the millions, Jim Mahoney, the city’s finance director, said the council and city officials never considered raising taxes.
Had council members voted to raise taxes, a special “rollback” election would have been required. Such an election would cost the city more than $10,000 – and residents would have to be convinced to vote for higher taxes.
“We've already raised the water rates,” Mahoney said. “I don't think it would be fair to immediately turn around and ask for a tax increase.
“Residents still have a lack of confidence in the city government. It is up to us to show them we are good stewards of the taxpayer's money, and that we will do the right thing.”
Mahoney further pointed out the council votes only on city property tax rates; county and school taxes are separate.
Some properties, due to increased home valuation, may see an increase in taxes, Mahoney said. However, the increase would have been more had the council not adopted the lower, effective tax rate.
For instance, if a property valued at $50,000 increases in value to $60,000 this year, taxes will be $374, roughly $28 more than last year, despite the lower tax rate. Had the tax rate remained the same, however, the owner would have owed $380 – $34 dollars more.
“Taxes will drop this year over last,” Mahoney said. “The amount, however, depends on whether a resident's property value has increased. We have no control over that.
“Last year, the average value of property in Palestine was $91,080. The numbers have yet to be reported this year.”
The city council will hold apublic hearings on the tax rate at 6 p.m. on Sept. 3, and another Sept. 9 at 5:30 at City Hall, 501 North Queen Street in Palestine.