Staffers and elected officials in Hemphill County’s five taxing entities have been immersed for weeks now in calculating tax rates and cutting budgets—a task made infinitely more difficult this year by the slowly accelerating oil and gas bust that has plagued this county over the last 12 months, and the subsequent plunge in property values.
In the next few weeks, local taxpayers will have the opportunity to comment on the proposed tax rates and to see how their tax dollars will be spent during the 2016-17 fiscal year, which begins Oct. 1. Three of those entities will hold back-to-back-to-back meetings next week, beginning with the city council’s public hearing on Monday evening, followed by the school board on Tuesday and the county commissioners the following morning. The water district will meet with the public on Sept. 12, and at press time this week, hospital officials were still looking over the calendar and hadn’t announced their hearing date.
These hearings are the culmination of a process that began when elected representatives of each taxing entity began reviewing their budgets and considering the expenditures that will need to be made in the immediate or more distant future. After receiving notices of certified property values from the Hemphill County Appraisal District office earlier this summer, each entity took the first step toward adopting a tax rate, by weighing the comparative advantages and disadvantages of effective tax rates and rollback rates, and of cutting back and lowering rates or gutting it up and asking taxpayers to ante up a little more next year.
The effective tax rate, which generally causes either glazed eyes or confused looks, is a fairly simple calculation, taking the numbers certified by the appraisal offices and determining the tax rate required at those values to raise the same amount of revenue as in the previous year. If values go up, the rate is lower. As they fall, however, the effective tax rate rises—as does the elected officials’ collective blood pressure.
The rollback rate is the maximum tax rate each entity is allowed to set without voter approval. It provides the taxing unit with approximately the same amount of revenue it collected the previous year for day-to-day operations, plus an extra 8 percent increase to maintain those operations and pay any accumulated debt.
If an entity adopts a tax rate higher than the rollback rate—which none of the local entities did this year—voters may circulate a petition calling for an election to limit the size of the tax increase.
Despite the gloomy financial landscape, the annual tax bill-palooza that most property owners dread will be remarkably unremarkable: Most of those bills should remain relatively unchanged from last year’s, as officials have chosen to invoke a round of belt-tightening rather than tell constituents their taxes are going up.
In the report that follows, we have provided information about each entity’s fiscal plan, boiling down the essential numbers that taxpayers need to understand and offering a snapshot of each entity’s budget priorities for the coming year. While in years past, we’ve highlighted an impressive phase of capital improvements—made possible in large part by the oil and gas boom days—the B-side of that label is far less flashy as our government officials assume a holding pattern, hoping values will eventually rebound, and hoping even more fervently that they won’t continue falling.
Some capital improvement projects were already well along in the planning stages when the boom went bust, but hospital and school officials have built up reserves in preparation for ambitious building projects now underway
On the following pages, we have compiled a summary of key information considered by each entity when setting tax rates and planning budgets:
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