Tax rate consideration attributed to loss of property values, disaster efforts

Kerr County leaders say that the July 4 flood disaster came in the middle of budget season, which may mean there will be some unknown factors as local officials try to put a fiscal plan in place for moving forward.  Normally at this time of year, county leaders would be looking at a budget plan that is restricted to a property tax rate increase of no more than 3.5% above the No-New-Revenue rate which is calculated annually, without seeking voter approval.  However, under disaster circumstances, Texas Tax Code 26.042 allows for local governments to calculate an emergency voter approval rate of 8% above the No-New-Revenue rate.

“That doesn’t mean the tax rate will go up that much,” explained Kerr County Tax Assessor-Collector Bob Reeves to commissioners’ during their regular meeting on Monday, July 14.  The difference in the normally allowed 3.5% calculation and the 8% calculation, “is not to pad a budget or anything like that,” Reeves said.  “It is for the unforeseen costs that have arisen out of the disaster.  And, I can only calculate what that would look like, if I get your approval.”

The court unanimously (5-0) approved the order authorizing Reeves to prepare those calculations for commissioners’ to review during budget planning later this summer.  “Our whole budget process is being eroded away,” noted Kerr County Judge Rob Kelly.  Already, two planned budget workshops had to be canceled while the flood disaster emergency response demands around-the-clock attention of county personnel, including elected officials.

Kerr County, Texas has not increased its property tax rates in recent years, instead approving a No-New Revenue rate.  The only exception in the past five years, was when the bond election was passed by local voters for a new Kerr County Animal Services facility.  “We are facing a two-pronged issue, which may force us to consider a higher than ‘No New Revenue Rate’,” Kelly said.

First, the judge noted, “We’re going to have to pay for this stuff.  And, FEMA will reimburse a lot of our emergency response costs.  FEMA is here, and I’m thankful they’re here.  But, they’re slow.  The last time we had a big FEMA project, it took at least two, if not three, years before we got reimbursed.”  “We have to be able to at least pay the contractors now then get reimbursed later,” Kelly said.

Second, the judge explained, due to the flood damages, Kerr Central Appraisal District’s chief appraiser has advised that lost value on local property appraisals may exceed $240 million, which essentially represents lost revenue for Kerr County.  “I support the victims of this devastating flood getting their property appraisals reduced to help with their tax bills,” Kelly said, but lower property appraisal values mean lost funds for the county and its operations that support local citizens.  Early estimates put county road damages at $8.5 million, and assessments are still being made daily.  “It is a true disaster,” he said.

Local residents who suffered property losses can get information on how to receive relief by visiting the Kerr County Tax Assessor-Collector’s web page on the county website:  www.kerrcountytx.gov.