City Council adopts no-new-revenue tax rate after lengthy discussion

Gonzales City Council members adopted a total no-new-revenue tax rate of 29.66 cents per $100 valuation after a lengthy discussion during a regular meeting Thursday, Sept. 12. The new rate represents an increase of 0.28 cents above the 2023 adopted tax rate of 29.38 cents.

The council did vote unanimously, however, to adopt a proposed fiscal year 2025 budget which calls for total revenues of $31,304,754 and expenditures totaling $36,121,645.

Council members voted 4-1 on two separate motions to adopt a maintenance and operations tax rate of 16.43 cents per $100 valuation and a 13.23 cents tax rate for interest and sinking (debt service). The lone vote of dissent on both of those motions was Place 4 Councilmember Ronda Miller, who said she had promised not to raise taxes and could not support an increase in the tax rate, no matter how miniscule.

“I am at a hard spot, because I made public statements and was elected to sit up here because I said I would not vote to increase taxes for at least three years,” Miller said. “So that's where I am, and even though it's a minute amount … it is still an increase. So therefore I'm having a moral issue or an ethical issue, because I know what I've said, and I know several of us up here — we're of the mindset that we don't want to increase taxes.”

Gonzales County Tax Assessor-Collector Crystal Cedillo came to the meeting at the invitation of Finance Director Laura Zella to help clear up any misconceptions council might have about adopting a tax rate.

Place 3 Councilmember Lorenzo Hernandez told Cedillo he was “under the impression that anytime you do the no-new-revenue rate, which was the old effective tax rate, that you are not raising taxes.” Cedillo explained the no-new-revenue rate is a calculation based on several different variables which is supposed to determine what rate will generate approximately the same amount of money as the prior year on property taxed in both years. Changes in debt service requirements, frozen property values, prior corrections and court-ordered adjustments can all impact the tax rate.

“A tax-rate calculation is not as simple as saying, ‘Here's your value, here's what your tax rate is going to be,’” Cedillo said. “There are a lot of variables that go into the tax rate calculation.”

The no-new-revenue tax rate will actually generate an additional $40,766 in revenue from property taxes, an increase of 2.28 percent, which includes revenue for both operations and debt. Meanwhile, new property added to the tax roll will generate an additional $41,338.60 in property tax revenue.

Miller said she was under the assumption that the council proposed the no-new-revenue rate because it was less than the voter-approval rate, which is the highest rate the council can propose and adopt without an election.

“You can propose any rate you want, as long as you don't propose over the voter rate, because once you do that, it's automatic election,” Cedillo responded. “But you can always adopt any rate lower than the proposed rate. You just cannot adopt a rate higher than the rate that you proposed.

“The rates that I calculate — they're not set in stone. You do not have to propose these rates. You do not have to adopt these rates. These rates are just what is required by statute that I calculate and give

to you, saying, ‘This is your no new revenue rate. This is your voter approval rate.’ By law, I have to calculate these and give these to you. Nothing says you have to go with this rate. You can go with the rate that's lower anytime you want, but it won't be what you need for your revenue.”

Precinct 1 Councilmember Joseph “Poochy” Kridler made a motion to adopt a resolution ratifying the property tax revenue increase that setting the rate at 29.66 cents would bring, which Mayor Steve Sucher seconded. That’s when Miller told her fellow council members she didn’t want “to just rush into voting right now.”

“I want people to stop and consider and think about it, even with a minute amount, it's still an increase,” Miller said. “And if you told your constituents you would not raise taxes, you're bound by your word.

“I would consider adopting another rate that did not increase the amount raised. I don't want to increase taxes, even if it's a minute amount, and the fact that it is a minute amount should make it less of an issue. It's not a whole lot, but that's where I sit.”

Sucher called for a vote and the motion failed initially by a 2-3 vote as Precinct 2 Councilmember Mariah Jordan, Miller and Hernandez voted against the resolution, while Kridler and Sucher supported it.

City Attorney Megan Santee then told the council they have to pass the resolution and adopt the rate as proposed since they had “already approved the budget.”

“We have to have our tax rate has to match our budget. It has to be balanced,” Santee said. “You already approved your budget, and your tax rate has to fund your budget. You basically, effectively said, ‘We're going to be approving a tax rate’ when you approved your budget and that is the amount of money you have to raise in your taxes. You've already approved your budget, and now you want to change your tax rate. You can't.”

Zella reminded council members she had even asked them if there had been any changes needed in the budget at the public hearing on it on Sept. 5.

“I expressed to all of you that the budget was based on the no-new-revenue rate,” Zella said. “I didn't change the amount or anything, so it was balanced based off of the no-new-revenue rate.”

City Manager Tim Crow said the impact of the new tax rate would be minimal to an average homestead value of $162,302 in Gonzales as the new rate would mean a difference in taxes of $4.54 for the year, or just a little more than 37.8 cents per month.

Kridler made a new motion to pass the resolution, which Jordan then seconded. Kridler, Jordan, Sucher and Hernandez all voted to pass the motion, while Miller voted nay.

Additional motions were made to approve the 2024 M&O and I&S ad valorem tax rates and levies of assessed valuation which then passed by the same 4-1 votes as the resolution did.