Council passed a 5-cent tax rate election (TRE) on top of the base budget yesterday after a lengthy public comment period that ran from 10 a.m. to 10 p.m.; further discussion is scheduled for today.
The speakers were divided between homeowners criticizing the Council for previous expenditures, those who were particularly offended by Council Member Mike Siegel’s plan to reduce funding for essential municipal services like public safety, even if a TRE should not pass, and those who humbly promised to urge their neighbors to pay $20 or so in property taxes annually in light of the drastic federal funding cuts.
Prior to 2019, when the state legislation limited the council’s authority to impose taxes at 3.5 percent without an election, the council had been increasing property taxes from 1 to 8 cents per budget. In its extraordinary session, the Lege is currently attempting to tighten that to 2.5 percent.
A considerable number of Council members were incensed when a late omnibus motion from Mayor Pro Tem Vanessa Fuentes and Council members Ryan Alter, Chito Vela, and Jos Vel squez passed. This brought the base motion down to 5 cents, the highest amount that the majority of Council members, including the mayor, will support. Concerns regarding maintaining the city’s reserves, or rainy day fund, at 17 percent by 2029 were raised by council members Krista Laine and Paige Ellis.
Fuentes retorted: It’s raining now. In my opinion, it is absurd that we are discussing our reserve strategy in three or four years, and many of the adjustments I have proposed are in response to organizations losing federal money. Fuentes reminded Council that our reserve policy was 14% at the time of my arrival in 2021.
I am aware that our reserve policy has evolved over time, but Ellis advised us to keep in mind the rationale for the changes and to truly adhere to them. What it does, in actuality, is it allows us to borrow money at a lower interest rate because we have the dollars saved up in case something terrible happens.
Apart from discussing the urgency of the situation, the majority of Council members were troubled by the 5-cent motion because no one could propose a change without it exceeding the TRE that would actually pass. “I’ll just say that my staff is having a hard time figuring out how to move forward now that we have a new base motion,” Siegel said, referring to the public’s difficulties.
According to Laine, your staff and the subquorum that calculated these figures—Alter, Fuentes, Vela, and Vel Squez—have had a lot more time to think about what’s in here. Ellis did warn, “I feel like I’m in a position to abstain on everything else that’s being proposed having an amended base motion that already pushes beyond five pennies.”
After passing several modifications, including continuing financing for the family stabilization grant and a climate revolving fund, among others, the council started to settle down around ten o’clock at night.
Assuming five pennies for a TRE, they still had 17.64 percent in the reserves after recessing with the modifications adopted. Ellis reiterated to those who were still watching at 9:53 p.m.: It’s still a little uncertain where we’re at. At ten a.m. tomorrow, they will resume.
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