Pflugerville Council abandons tax increase after pressure from residents

Pflugerville City Council was considering adopting a budget for Fiscal Year 2021 with a whopping eight percent increase in operating revenue.

This was significantly higher than the guidelines set in Texas state senate Bill 2, which calls for a 3.5 percent increase.

That’s when an advocacy campaign set in motion by the Austin Board of REALTORS® put the necessary pressure on Council to do a complete 180.

Just two weeks after the initial discussion, Council instead announced it was considering a lower proposed budget and maximum tax rate. This budget proposal was for $216.32 million, a cut of $646,000, with a maximum tax rate of $0.4863 per $100 of property valuation – the highest rate the city can consider without restarting the budget adoption process.

In July, Council was considering a budget of $216.6 million with a tax rate of $0.497 per $100 of valuation. That rate was based on an approximately seven percent increase in operating revenue.

The REALTORS® put out a call for action because, with limited housing inventory and soaring prices in the midst of an unstable economy, such a property tax increase would be untenable for most homeowners in Pflugerville.

Prior to the amended budget and tax rate presented at the August meeting, several residents spoke against the initial proposal.

Senate Bill 2, which was signed into law by Gov. Greg Abbott in 2019, limited a city or county to a property tax increase of 3.5 percent from the previous year. Any larger increase would require voter approval.

Council was initially trying to use a loophole in the Bill as justification for its seven percent increase. The Bill allows for an exception, “if any part of the city is located in an area declared a disaster area during the current tax year by the governor or by the President of the United States.” Council initially suggested that the COVID-19 pandemic and the subsequent disaster declaration was justification enough.

But those residents who spoke at the August meeting indicated that the disaster declaration was created for natural disasters and not health crises. One resident pointed out that the spirt of that section of the bill was added in the aftermath of Hurricane Harvey.

Others said that while the city’s plan to use the disaster exemption was technically legal, it was transparent and morally bankrupt.

According to the Community Impact Newspaper, after the public comment portion of the meeting, Council Member Mike Heath recommended sticking with the maximum rate of 3.5 percent, as outlined, and to make up for the lower rate by trimming the budget in order to alleviate the tax burden on homeowners.

Heath suggested cuts to merit raises, the police department’s new shooting range, and the transportation pilot program.

According to the Community Impact Newspaper, Council then approved the removal of the city’s $150,000 parks master plan and the police department’s $100,000 firing range replacement from the budget. Council also directed the city to increase sales tax revenue projections by $200,000 and use $200,000 from the rainy-day fund to meet the desired maximum rate of $0.4863 per $100 valuation.

All told, the budget presented at the August meeting marked a 13 percent increase over the 2019-20 budget.

If adopted, the maximum rate would result in an estimated average city tax bill of $1,255.47 for a home listed at the average home value of $258,167 in Pflugerville. Under the current tax rate, the average city tax bill is approximately $1,281.64.