Rate hikes likely as Orange eyes budget

 

Last updated 8/7/2018 at Noon



Dave Rogers

For The Record

The cost of keeping the City of Orange running and making it a place citizens want to live a year after Tropical Storm Harvey will be a higher tax rate for most in 2019.

A resident with a home carrying a 2018 value of $100,000 after homestead and other exemptions could see his city tax bill rise anywhere from $51.63 to $123.00, based on 2019 effective and rollback rates.

Senior citizens will see no change in their city tax rate if they have previously had their tax rates frozen by Proposition 13.

“Hurricane Harvey is still not over for some and the last thing we want to do is kick someone when they’re still down,” Mayor Larry Spears, Jr., said Tuesday after a city council workshop to go over the Fiscal Year 2019 budget.

“To some people it will feel that we’re kicking them, or that we’re raising taxes to hurt them. We’re not kicking them; we’re trying to make the city work.

“I just want to make sure the citizens know that we are not wanting to raise taxes, but there comes a point where we’re going to have to do something.”

Many residents who suffered Harvey damage saw their home values drop in 2018. The flip side is, for the next year, at least, the tax bill should be smaller for those residents.

Those whose property values rose or remained the same because they were spared Harvey damage will feel a larger bite from a tax rate increase in 2019.

Spears said Tuesday he had received calls from mayors of other cities in Orange County citing needed tax rates hikes to counter the fallen values and fearing citizen protest.

A raise in the tax rate does not always mean a property owner is charged more taxes, as the rate is multiplied by the tax value to determine a person’s tax bill.

Harvey caused Orange’s total tax values to decrease nearly 9 percent, which means the city will have $80 million less to operate with in 2019 if it maintains its current rate of 71.774 cents per $100 value, Shawn Oubre, city manager, told the council members Tuesday.

The effective tax rate, the rate calculated to bring in the same amount of revenue as last year on properties taxed in both years, is 76.937 cents per $100 value, Oubre said.

That was the figure on which Oubre based his first draft of the 2019 budget he presented to council Monday morning.

“Not surprisingly, that is a deficit budget, because things cost more than last year,” he told council members.

“I’m asking ya’ll to set priorities, because we are going to make some cuts. The only alternative [to raising the tax rate to the effective rate] is cutting services. And since 75 percent of our budget is people, cutting services is cutting people.”

Mayor Spears said he directed Oubre to have his department heads cut their lists of budget requests to a minimum.

Still, plenty of new expenses appeared for the budget wish list, moving Oubre to remind council it couldn’t go above the rollback tax rate of 83.005 cents per $100 without forcing citizens to a vote on the tax rate.

The city manager handed out a list of capital outlay requests by the city departments. Of $1.6 million in requests submitted for the general fund, Oubre proposed granting just $650,000 worth, a reduction of nearly $1 million.

Oubre was in favor of most water and sewer fund requests, checking off $841,000 worth, including $300,000 to run two miles of a new water line from Dempsey to Highway 105 and $150,000 to replace a sewer line in the Lowe Addition.

Oubre said he wants the city to add a third grapple truck to supplement the two used in monthly removal of residential debris pickup and to be paid for by city fees.

Councilman Pat Pullen said he wants the city to add an employee to code enforcement to force citizens to clean up around their properties.

Spears called for using economic development or hotel/motel occupancy taxes to fund a city event planner. Currently, city economic development director Jay Trahan has been handling the city’s special events.

“When we brought Jay on, he was doing two projects a year, the boat races and Art in the Park,” Oubre said. “Now he’s doing 18 projects a year.”

“We want to use Jay to court new businesses,” Spears said.

Council will meet again to go over the budget at 2 p.m. Thursday at the Danny Gray Room at the Orange Police Department.

 

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