For residents, understanding how property values are assessed and what the upcoming city tax rates will mean for Corsicana in 2020 has raised several questions on how these topics are determined.
Speaking with Connie Standridge, City Manager of Corsicana, the Daily Sun explored the process in further detail, while getting an explanation on which tax rate is best for the city.
The property values in the City of Corsicana are set and determined by the Navarro County Appraisal District. NCAD is a completely separate and independent entity from the city that has its own governing board. Board members are nominated and approved by the Council and other boards. The school board tabled the appointment at their last meeting.
During the appraisal process, residents are able to ask questions to ensure that their property is accurately valued.
Property taxes for homes have not changed for 16 years, set at $0.6272 for every $100 of value that you have on your home. The tax system structure is intuitively based on the value of property, not a flat fee or flat rate, with required legislative wording that states if taxes are going to be raised.
If property values go up, residents are required to pay more taxes. If values remain the same, rates do not increase.
Once completed, NCAD is required on an annual basis to give the city an estimated total value of preliminary property values in the City of Corsicana on Apr. 25, and an update around the first of June. City officials are prohibited by law from having any input into the determination of the property values.
During this time, the City Manager prepares a budget estimate for property values that is built with the presumption that the tax rate will remain the same. This year's budget was delivered to the Council on June 12, the first budget work session.
By July 25, NCAD is required to deliver the total values to the city and the Tax Assessor Collector, Mike Dowd. This date is the legal deadline for the city to determine values for the city of Corsicana. Dowd is then solely responsible for delivering the numbers for the effective tax and rollback rates. Once Dowd certifies the rate, he delivers the proposed budget rates to the city by Aug. 7.
This year, the budget was delivered early on Aug. 5, allowing the City Manager time to correct any preliminary figures, submitting the completed budget to a work session to set the tax rate. This has been the schedule for the past 15 years.
Upon submission, this proposed budget starts a series of three state law mandated hearings that take place over a month. Two are open to the public, with action taken at the third meeting on Sept. 23, where the budget will be adopted.
Once the City Manager gets final numbers from the Tax Assessor Collector, the City Manager has the option to prepare the budget based on one of three types of tax rates: Current rate, rollback rate, and effective tax rate.
Current Rate: This is the rate that the City of Corsicana has operated on for the last 16 years, and has not gone up.
Rollback Rate: The property rate that a city can adopt and not be subject to a rollback election (voter approval of a tax rate). Current rate is two cents less than the rollback rate.
Effective Rate: The tax rate that is dependent on all costs remaining the same as they did the previous year, without escalating factors in expenses or rates that effect the day to day operation of a city (such as fuel and insurance), or a city needing no improvements or additions for infrastructure or capital projects for the tax year. In order to adopt an effective tax rate, something else must be cut from factors built into a budget.
To illustrate this point, while public safety factors such as police or fire services are given seniority, an effective tax rate would require a chief to either make cuts in costs that cover supplies and materials such as ammunition, fire hoses, or fuel for service vehicles, or choose to cut costs by reducing personnel.
This year, the City of Corsicana increased costs for EMS, based on previous decisions to hire three additional paramedics and to put six full-time ambulances in service. The ambulances are frequently used, and need to be staffed.
“We hear time and time again that citizens appreciate that good service.” said Standridge. “They want the public safety service.”
Standridge stated that she evaluated the preparation of a balanced budget “very carefully.”
Budget Surplus Costs
Every year, the City of Corsicana expects to have a budget surplus that comes from city positions that either cannot be filled, or are not filled.
Standridge cited the police department as an example. If the police department has five positions available, they may test up to 10 candidates. Of those selections, five will pass the exam, and after background checks, one or two may be selected to fill positions. The budget is planned around filling those required positions, though some may remain unfilled for the year.
With that surplus money, the City does not spend the money, with the funds going back to the Council every year in the form of revenues covering expenses. Once the fiscal year is closed out in September, the fund balance is delivered back to the Council.
In March of the following year, the Council makes the decision on how to best spend that surplus money. Standridge reiterated that “rather than spend money before we think we have it, we spend money after we know we have it.”
The surplus funds are repurposed for various potential considerations such as: Adding to fund balance, renovating streets, giving employees one-time payment in lieu of a raise, or infrastructure projects such fire station renovations, or drainage projects.
“Rather than us budget to do all those things and then not come in under budget, we budget very conservatively,” Standridge said. “Once we deliver that back to the council, then we give them the option on how they want to spend it.”