Tax Attorney Humble Texas
Humble City Council approved a property tax rate of $0.25 per $100 valuation for fiscal year 2018-19, 5 cents higher than the city’s 2015-16 property tax rate, at a special meeting Sept. 20. Despite this increase, the city of Humble maintains the third-lowest tax rate out of the 22 cities within Harris County, according to county data.
Based on the new rate, the owner of a $150,000 home will pay about $375 in property taxes to the city, a $30 increase from the $345 paid on a $150,000 home last year.
Humble City Manager Jason Stuebe said he anticipates the city will continue increasing its property tax rate over the next five or 10 years until it reaches about $0.35 per $100 valuation.
Although Stuebe could not provide specific long-term projects, he said the increase will allow the city to improve services to residents through a long-term strategic plan as well as prepare it for future complications that could affect its sales tax base. Additionally, it prepares Humble for future state legislation that could limit the city’s ability to increase property taxes in the future.
“If we are going to put ourselves on a course that is sustainable and provides the services at the level we need them, then … we’ve got to get the revenue … to a more appropriate level,” Stuebe said.
Property tax increases
Property tax revenue is the city of Humble’s second-largest funding stream behind sales tax revenue—which comprises almost half of the city’s operating revenue, according to city budget documents.
Bennett Sandlin—executive director of Texas Municipal League, which provides services and advocates for the interests of cities—said this is uncommon in Texas as most cities rely more heavily on property tax revenue than sales tax funding.
“We do a survey every decade or so of revenue,” Sandlin said. “And our latest survey shows about 35 percent of an average [Texas] city’s revenue comes from property tax, and then about 30 percent from sales tax.”
According to Humble’s budget, the city’s operating expenses for FY 2018-19 are $33 million—a 12 percent decrease from the city’s FY 2017-18 operating expenses. Meanwhile, revenue to fund city operations is estimated at $29.39 million.
Stuebe said the city had to decrease its operating budget by 12 percent in order to get it more in line with its budgeted revenue. Even with this decrease, the city will have to fill that roughly $3 million gap to cover operating expenses by pulling money from the city’s reserves—which is something city officials would rather avoid, he said.
“Our reserves have precipitously gone down year over year over the last five years, and quite frankly we just can’t do that anymore,” Stuebe said.
Increasing the city’s property tax rate to $0.35 per $100 valuation in the next 5-10 years could help generate additional revenue and prevent officials from pulling from the city’s reserves in the future.
Additionally, increasing the property tax rate will allow Humble to branch out from the core services Humble now offers, and it will fund what comes out of the city’s first long-term strategic plan, which officials will begin working on in October.
“We’ll be able to start branching out from core services and invest in things, such as quality of life and parks and recreation, programs and things like that,” Stuebe said. “Because if you look at trends and high-performing cities, … it’s those … that place an emphasis on [quality-of-life services].”
Tax Attorney Humble Texas