August 28, 2019 835 PM
City council is proposing a tax rate increase for 2019 that would bump up taxes $22.55 for every $100,000 of home value. The first public hearing over the proposed tax rate change will take place tonight at 5:30pm in the Casner Room at Marfa City Hall. A second hearing will occur at 6pm on Tuesday, September 3.
The homestead exemption, approved earlier this month, shifted the tax burden slightly away from Marfa’s 210 homesteaders. Instead, those tax burdens will fall onto businesses and non-homesteaded Marfa homeowners, including those who rent their houses short-term and long-term.
“The only reason our tax rate is going up this year is because the city provided a homestead exemption, which lowered our available taxable property,” city accountant Dan Dunlap said. “So that exacerbated our tax rate, increasing it.”
“The main thing I want people to know and understand is that the city is not allowed to benefit from increased property valuations. When property value goes up, our tax rate goes down,” said Dunlap. If Marfa hadn’t implemented a 10% homestead exemption, its tax rate would have dropped a couple cents this year.
When taxable value decreases, as it will this year, the city is allowed to raise their tax rate to return to the level of revenue the city brought in the previous year.
However, due to the proposed raises, the city will pull in an additional $28,474.56 in taxes this year. The city always aims to hold the Interest and Sinking tax rate steady, so the 7.89% tax increase is for Maintenance & Operation. Eight percent is the highest the city is allowed to increase the rate before triggering an opportunity for citizens to petition and vote down the tax rate.
According to City Attorney Teresa Todd, the Texas legislature has voted that after 2019, taxing entities will only be able to levy a 3.5% tax before triggering an election, which she characterized as a “potential enormous trainwreck” for funding local governments.
This year’s raise is said to serve the purpose of “funding daily operations and maintenance and making principal and interest payments on debt,” according to the city’s notice.
“What we’re doing with taxes is we’re trying to increasingly shift that burden to a property tax owner. It’s getting increasingly harder. The Texas legislature is on the side of the property owners. We need to take all we can get,” Dunlap said of this year’s nearly maxed out raise.
