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ESD No. 9 proposes to increase tax rate, holds first public hearing

October 4, 2018 GMT

Harris County Emergency Services District No. 9, which serves the Cy-Fair area, is proposing a tax rate increase from 5.271 cents for each $100 of taxable property value to 6 cents for each $100 of taxable value.

According to officials with ESD No. 9, the tax increase has been proposed in order to fund new land acquisition for fire stations, purchases of new apparatuses for the district and additional personnel.

“The district does not want to seek loans and pay interest on such acquisitions to the maximum extent possible,” said Tim Gibson, managing director for ESD No. 9. “For example, a new fire station costing $4 million financed over 15 years at around 3.75 percent (interest) ends up costing the district an additional $1.2 million. The district can only earn on its best day about 2 percent in interest on its investments. The taxpayers come out way ahead by not financing these acquisitions.”

The proposed tax increase will increase total property tax revenues for ESD No.9 by 13.74 percent. In the past, Texas Governor Greg Abbott planned to limit annual local governments’ property tax revenue growth to 2.5 percent. Gibson said the proposed tax increase is not related to talk of property tax reform in state government, although it is something the district is watching.

“At this point we don’t really know exactly how the proposed tax reform will work,” he said. “But, the initial pronouncement is that the increases in the tax revenue of the district would be capped at 2.5 percent without holding a costly election. It would be difficult, perhaps impossible, for the district to provide the same level of service if such a revenue cap was to placed on the district.”

Because the rollback tax rate, 5.6970 cents for each $100 of taxable value, is lower than the proposed tax rate, there is a possibility taxpayers in the district could petition for the proposed tax rate to be reduced to the rollback rate, which would mean voter approval is required to raise the tax rate to 6 cents. Gibson said the district is not expecting a rollback election.

“The marginal cost to a taxpayer is small and the community appreciates the fire and EMS service and wants prompt fire and EMS service provided by properly trained personnel,” he said. “On a house that costs $200,000, the taxes increase from about $106 a year to about $120 per year. That additional cost to the taxpayer is about $1 per month over the course of a year. That is without exemptions in place, such as an over-65 exemption of $160,000, disability exemption of $160,000 and a 5 percent homestead exemption.”

In an effort to give the community a chance to voice their concerns or questions about the proposed tax increase, ESD No. 9 is hosting public hearings. For the first meeting on Oct. 1, two community members asked questions about the proposed tax rate, including why ESD No. 9 is increasing the tax rate and demographic information used to support the need for a tax increase.

ESD No. 9’s commissioners will answer those questions during the next public hearing on Oct. 8 before voting on the proposed tax rate on Oct. 18.