Tax Rate, Libraries, and Rec. Centers

As Mayor, the FY 08 – 09 city budget was my fourth and possibly most interesting one. It was not the most interesting because of the tax rate, unfortunately, while we operate a very lean government and budget, we had to do our first rate increase since I’ve been Mayor. It was the most interesting because it raised one question the city council and community will need to answer. Is it our only goal to keep the property tax rate as low as possible?

Quick Review of budget process - City staff reviews projected revenue (property tax forecast from county tax collector, sales tax projects, etc.) that will fund the General Fund for the up coming year. We then establish a baseline of how much it will cost to provide the same services provided the previous year. Then with council input we adjust this to reflect the needs and request of the citizens.

For a rapidly growing city like ours, you can imagine that the demands for projects and services are constantly growing. Our task as council is to set them in the right priority. Up to now our growth plan has been simple but effective. Our plan has been to invest directly in infrastructure that will generate a return on investment to the community in the form of increased commercial tax base, increased sales tax, and more local jobs.

FM 1626 is the perfect example of this plan in action. Our direct investment in that road project brought in over 2 million square feet of commercial/retail development and a much need 128-bed regional Seton hospital. Our return on investment is increased sales tax, and increased commercial property tax base. As these project fully ramp up, it will allow us to reduce the burden on the residential tax base.

This strategy of directly investing property tax dollars into infrastructure improvements is working, but we are still about 5 years away from when we can fully reap from the increases in both sales and commercial property tax rate. Until then we will still need to rely heavily on property tax revenue.

So back to the question I posed earlier, “As a council, is it our only goal to keep the property tax rate as low as possible”. Accomplishing this would be fairly easy for council. Only spend money on projects that increase sales tax and commercial property tax base; and provide city services at the absolute minimum levels.

But is this our only goal or are we trying to accomplish more as a city. As I said during my closing comments on the budget, if the lowest property tax rate is our only goal, then we need to have some serious policy discussions about the capital projects we have coming up.

To put it bluntly, if we are currently having prolonged discussions about shaving one-tenth of a cent off the property tax rate, then we have to examine if we truly want to build a $4 million dollar library or a $15 million dollar recreation center or spend any more on park improvements before that 5 year period I spoke of earlier. While these types of project add greatly to quality of life, they are far from being self-sustaining and only increase the need for additional staff and annual operational costs.

Now I’m not advocating for or against these types of projects. As Mayor my job is to find a way to provide what our citizens want in a responsible manner. I’m merely raising the fact that as a community, we must actively decide what we want and more importantly what we are we willing to pay for.

Mayor Mike Gonzalez

Ed "Too Tall" Jones . . . here in Kyle

The city of Kyle welcomed Ed "Too Tall" Jones.

DIRTY CAMERA . . . STUCK ON RED

I would like to thank everyone that contact city staff and myself over the weekend regarding the light on the East-Northbound frontage road at Kyle Parkway.

It seems that this unusually long red (and very fast green) was the result of a dirty camera mounted on the singal traffic light. This camera helps control the signals and detects how many cars are waiting in the lane. Apparently the combination of heavy nearby constuction and drizzle tricked our camera into thinking no cars were waiting on that lane. TxDOT did clean the camera on Monday and will continue to monitor.

My thanks to city staff and TxDOT for following up on this.

ON THE ROADS AGAIN

I always chuckle when I think of that famous commercial with the great Yogi Berra at a crowded sports bar saying, ”Nobody ever comes in here any more . . . . It’s too crowded.”

In a way that best sums up a large part of our mobility challenges in Kyle. With more subdivisions, more commercial developments and more local employers; comes more people, more cars and more mobility challenges. Consider it a natural byproduct of our success.

In my last article about transportation I discussed some specific issues. With this article I would like to expand the discussion and share some insight I have gained while trying to find traffic solutions; both as mayor and as a CAMPO Board member.

As a car driver, one thing I never considered was the different governmental entities and bureaucracy my tires interacted with. Next time you drive into Austin or San Antonio, think about this as you drive. You leave your home and immediately get onto a city road; then you probably jump onto a county road, and then jump on a state Highway that is also under some jurisdiction of the Federal Department of Transportation and a local Metropolitan Planning Organization (CAMPO in the Austin area).

That’s five different governmental agencies whose decisions must be somewhat compatible to allow us to get to work, pick up our children from school/daycare, get groceries, get freight and shipments. Working somewhat independently, these five entities must plan what roads will be built and how to pay for the construction and maintenance.

Lets first talk money. Every time we gas up our cars, we pay a tax on every gallon. The state gas tax is 20 cents per gallon and the federal gas tax is 18.4 cents per gallon. So for every gallon we buy, a total of 38.4 cents goes towards the gas tax.

In theory, this money should go directly back into improving and maintaining our roads. However, only 87% of the federal gas tax collected in Texas makes it back to our state. The federal government diverts 13% to projects in other less populated states. The remaining 87% gets whittled down further by our state legislature that diverts a minimum of 25% to fund education. With the federal government considering raising the gas tax by over 40 cents, it causes me to wonder how much of the increase will find its way back to Texas roads.

However, another and more significant problem than diverted gas tax dollars is the dramatic increases in highway construction costs compared to funding levels. The last time Texas raised the state gas tax was back in 1991 the federal tax was last raised in 1993. From 1991 to 2002, the highway construction cost index increased by 3 to 4 percent annually. Between 2002 and 2007 that same index increased by 62 to 63 percent. In short, even though the price of gas has sky-rocketed, even though construction costs have increased dramatically; we still only have 38.4 cents per gallon go to build and maintain our roads.

For fiscal year 2008, TxDOT was allocated approximately $8.721 Billion to fund maintenance and new construction projects. However, the funding has not developed as anticipated. In response, TxDOT will likely make drastic cuts in new project developments and focus on maintenance of existing infrastructure. Deepening the wounds, the federal government has taken back $666 million in planning funds and expected to take yet another $250 million.

So how does this impact Kyle? Well, most of our significant traffic issues are on TxDOT roads and intersections. Given the background we just discussed, one can assume there is not a deep pool of money ready and eager to fund state projects within our city limits. To make these projects happen sooner rather than much later, the city will have to step up to the plate and fund significant portions of these projects or live with increased congestion.

Another possibility for Kyle would be to find a way to utilize some of the $133 million of pass-through money still floating around Hays County. Last year, Hays County Commissioners placed a $153 million road bond proposal to improve roads throughout Hays County (none in the city of Kyle). Under the terms of the pass-through agreement between Hays County and TxDOT, TxDOT would reimburse up to $133 million for these projects. Unfortunately, strong opposition to the bond was organized and it ultimately failed in the election. Working with Commissioner Barton, some of these funds may be utilized on the IH-35 corridor where support for the failed bond was actually strong.

In closing, I would like to invite you to a special public meeting to be held at the Kyle City Hall on January 31, 2008 at 6:30 p.m. Council member Lopez, city staff, and myself will go over some of our current mobility projects and take feed back from the community. This feedback will be critical as we work on prioritizing our road projects and updating our master transportation plan.

Seton and The Village at Kyle

Above is an animation provided by SCC development of what the Seton and Village at Kyle project will look like at completion.

STORES SHOWN ARE FOR ILLUSTRATIVE PURPOSES ONLY.*