A very slight decrease in Buda’s ad valorem tax rate could be forthcoming, according to a presentation given by city staff on the proposed 2018 budget Tuesday.
But the decrease may not make an impact on lowering residents’ property tax bills as home values increased by 17 percent this year, said Kenneth Williams, Buda city manager.
Buda City Council members heard the first presentation on the Fiscal Year 2018 proposed budget at the Aug. 15 council meeting. The budget will not be adopted until September.
Williams said the city’s methodology when putting together the budget included being fiscally conservative, being in a stable economy, practicing zero based budgeting, using the general fund balance and softening the tax rate.
Buda’s current tax rate is .3704 cents per $100 valuation. The rate is projected to go down to .3673 cents per $100.
Williams said while the tax rate would be lower due to the use of the general fund, home values would still continue to rise each year, which in turn drives up the overall cost of taxes on a home.
However, city officials said Buda’s interest and sinking (I&S) rate is lower than what was promised to voters when they approved the 2014 bond. City tax rates are comprised of operations and maintenance (O&M) and interest and sinking (I&S).
Buda’s proposed I&S rate for 2018 is .2614 cents, which is roughly .03 cents lower than what was projected prior to the bond. Williams said there will be no new debt in FY 2018.
In comparing area tax rates, Buda came in second behind Dripping Springs as the lowest property tax rates in the county. Dripping Springs has an ad valorem tax rate of .1700.
The city of San Marcos ranked highest on the list at .6139, while Kyle’s proposed tax rate is .5416.
Williams also provided a finalized amount for service grant allocation, which is projected to total $29,000 in 2018.
Williams said the city has earmarked $30,000 in the general fund for a redistricting study, which would be needed if Buda residents vote to adopt the amendments to the city charter during the November election.
City documents also state that $118,826 is being allocated to give city employees a 2 percent cost of living pay increase, while $60,000 will be spent on a roadway impact fee study.
Buda is also budgeting $86,000 for in-house construction services for a drainage project in the Bonita Vista subdivision.
Adoption of the tax rate and the FY 2017-2018 budget will not take place until after a public hearing in September 2017.
The new fiscal year begins Oct. 1
Proposed 2018 tax rates for each of the major Hays County cities
- Buda – .3673 (.3704 in FY 2017)
- Kyle – .5416 (.5748 in FY 2017)
- San Marcos – .6139 (.5302 in FY 2017)
- Dripping Springs – .1700 (.1700 in FY2017)
• Wimberley does not levy a property tax rate
** Each value is per $100 property valuation
