No tax rate increase planned for city
By BRUCE ALSOBROOK, News-Telegram Managing Editor
August 13, 2008 - Sulphur Springs City Council members will conduct a special meeting Thursday evening to hold discussions on the proposed budget for the coming fiscal year.
The meeting, which begins at 6 p.m. at the Council Room at the Sulphur Springs Municipal Building, will include discussion "on a vote to propose a tax increase" and scheduling two public hearings on the city's property tax for fiscal year 2009.
The wording "propose a tax increase" may be a bit misleading, however. Peter Karstens, the city's financial director, said today that the tax rate is expected to remain the same as fiscal year 2008, which was set at 44 cents per $100 of property value.
The city will see more revenue from the tax, however, due to increased property evaluations by the Hopkins County Tax Appraisal District.
Karstens said the Sulphur Springs should see a revenue increase from the taxes of about 4.5 percent due to the rising commercial and residential property values.
But the financial director also said the increase in revenue will still keep the property tax level below the rollback rate. Other taxing entities in the county may not be so lucky, however.
A rollback rate essentially requires a a public vote to approve or lower the tax rate if the levy would generate excess revenue for a city, county, school or other district.
The taxing entity first calculates an "effective tax rate," which is an amount that would provide the governmental body with approximately the same amount of tax money it received the previous year.
The rollback rate provides the same amount of tax revenue spent the previous year for daily operations, plus about 8 percent. It also includes the amount needed to cover debts.
If a governmental body adopts a tax rate above the rollback amount, voters can circulate a petition calling for an election to roll back, or limit, the size of the tax increase. School districts can also call for an election.
Rollback elections are not common in Hopkins County, but one was held in 2007, when school officials in Miller Grove ISD called for a referendum seeking voter approval for a rate above the rollback level. School officials said they needed the money to meet budget needs and asked voters to approve a tax higher than the limits set by the state legislature.
The measure, however, was voted down, losing by about a dozen votes out of approximately 160 cast.
One local school administrator recently said that, due to budget pressures, he wouldn't be surprised if several districts in the area don't have to deal with rollback rates.