City of San Angelo Poised to Raise Taxes

SAN ANGELO, TX — San Angelo residents may see higher taxes unless they closely monitor the city's budget process.

This situation applies not only to the city but also to the county and school districts, though school budgets are influenced by the Texas Legislature, which is not in session this cycle. We can discuss the school district in another article. For now, let's look at the City of San Angelo.

Forget the FY 2024 tax rate of $0.7042 per $100 of valuation. What matters now is the "No New Revenue Rate."

The No New Revenue Rate is the tax rate that generates the same amount of revenue for the next year as it did this year. With property valuations soaring, the amount you pay (or your landlord pays) for owning property is:

(Tom Green County AD Appraised Value / $100) x tax rate = Your Tax

If your appraised value increased and the tax rate stays the same, it results in a tax increase. However, if the City taxes you at the No New Revenue Rate, your tax bill will be similar to last year's.

Property values have certainly increased for FY 2025’s budget cycle. The City of San Angelo's No New Revenue Rate is $0.6566 per $100 in valuation and compensates for the appraisal district's hikes in property values. If the City sets the rate above $0.6566 per $100, it constitutes a tax increase. The Texas Legislature requires the City to publish that rate, and if a rate above $0.6566 is approved, the city council member proposing the budget via a motion must declare it a tax increase.

Every year, citizens commend local politicians for “lowering the tax rate” when, in fact, taxes have increased. Don’t be misled this year. Here’s why.

New properties and property improvements added to the tax rolls are not included in the revenue calculations for determining the No New Revenue Rate. As of the last budget meeting, the city council was still awaiting final numbers for this from the appraisal district, but the amount of extra money flowing into the city's coffers unmitigated by the 3.5 percent annual revenue cap (the rollback rate) is significant.

If the projected revenues increase more than 3.5 percent for next year over this year, the City is required to place the new tax rate on the ballot for voter approval.

The biggest expenses potentially necessitating a tax increase are city employee wages and salaries. At the budget meeting last week, by raising taxes to the current rate ($0.7042 per $100 in valuation), the city anticipated around $2 million for raises, equating to an approximate 3.5 percent raise for all city employees in FY 2025.

The impact of city wage increases on your property taxes, and thus your personal finances in January next year, could be significant. Rumors suggest the police department will demand an 8 percent salary increase across the board. Newly elected Chief Travis Griffith and Assistant Chief Craig Thomason emphasized the department's resource constraints during public comments at the last meeting, highlighting the cessation of cold case investigations and threatening that misdemeanor crime investigations might be next.

If the police receive a substantial raise, the council must also consider similar pay boosts for the fire department, as both are crucial for public safety. However, if public safety consumes the entire excess $2 million with significant raises, what about the hardworking city workers at the water department who toil overnight to fix broken water mains?

The City will face tough decisions over the next several weeks. It's crucial for residents to stay informed and understand that any tax rate over $0.6566 is a tax increase.