By Cheryl Skinner

Missouri City officials last week approved the effective tax rate for the forthcoming fiscal year, setting it at 52.84 cents per $100 valuation.

Officials said the decision will allow the city to continue to provide residents with “excellent services and to maintain its AA credit rating, while tightening its spending belt.”

In a presentation to city council members and residents at the meeting, City Manager Frank Simpson stressed that although the city is facing a challenging economy, Missouri City is in a “sound financial condition and the City has a proud fiscal legacy to continue to build on.”

The 2008 property valuation was 51.7 cents. The increase was necessary because the city’s total taxable value last year for both residential and commercial property was almost flat. To generate the same amount of revenue from existing property as last year, city council adopted the new, higher, rate.

Simpson explained that cutting spending in the General Fund and devoting tax revenue for the sale of bonds will enable Missouri City to benefit from current low interest rates and construction costs while moving forward with capital improvement projects. This policy will ultimately enable the city to maintain and enhance property values and to create on-going savings. Projects to improve mobility, drainage and community amenities are some examples. Overall, Missouri City’s 2010 operating budget of $33.2 million was reduced by 2.05 percent from last year, or $695,000. The total certified property value for 2010 is $4,176,574,842, up from $4,167,163,959 last year. The proposed tax rate of 52.8 cents would allocate 34.7 cents for maintenance and operations (M&O) and 18.1 cents for debt for capital projects (Interest & Sinking ) compared to 35.4 cents for M&O and 16.4 cents for I&S last year, thereby shifting tax revenues from operations to capital projects.

The new property tax allocation, which was a topic of discussion at about three public meetings, would result in a $750,000 reduction in revenue needed for maintenance and operations. One option to make up this shortfall is salaries, which encompass a large portion of the city budget. The city is considering not filling all full-time vacancies, except police officers, firefighters and public safety dispatchers.

All departments are looking at cutting expenses to save $50,000 and the employee health insurance premiums were less than projected for a savings of $100,000.

Among the reasons for the decline in property values last year for some homeowners were the national housing crisis, appraisals valued while homeowners were still cleaning up from Hurricane Ike, and a lag in the increased valuations of homes near the Quail Valley Golf Course.

Responding to the subsequent tax increase because of these issues, resident Susana Paul, a district aide at Glover Elementary School, said: “I’m okay with the tax rate increase, because my property values have gone down a little, and I’ll probably be paying the same amount. I live on the border of Harris County and get some of my services from the county, but I wish I could have [all] Missouri City services.”

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