Commissioners propose voter approval tax rate, rescind retiree stipend passed last year

Gonzales County commissioners banked the ability to increase the county tax rate for years — saving it for a so-called “rainy day.” On Monday, Aug. 11, commissioners determined the proverbial rain was falling significantly enough that it was time to call in that marker.

After years of keeping the tax rate at the no-new-revenue level, the commissioners voted unanimously to propose a 2025 voter approval tax rate of 26.89 cents per $100 valuation — an increase of 6.57 cents above the 2024 tax rate of 20.32 cents and 5.86 cents above the 2025 no-new-revenue rate of 21.03 cents.

Commissioners also voted 3-2 to rescind a measure adopted last year which pays certain retirees $300 per month — or $3,600 per year — until their deaths to cover the cost of a Medicare Silver Choice supplement plan after concerns were raised by a third-party auditor about not only the legality of the measure, but the negative impact it has on county finances. It will end after Sept. 30, 2025.

Tax rate

Commissioners have set a 9 a.m. Tuesday, Sept. 2 public hearing on the proposed budget and tax rate for 2025. The proposed fiscal year 2025 budget will officially be filed by County Judge Pat Davis on Friday, Aug. 15, once he has received all department’s requests for funding.

The no-new-revenue rate is defined as is the tax rate for the 2025 tax year that will raise the same amount of property tax revenue from the same properties as it did in the 2024 tax year. The voter-approval rate is the highest tax rate the county may adopt without holding an election to seek voter approval of the rate.

Normally, under a state law passed in 2019, the county can only increase the maintenance and operations (M&O) portion of the tax rate by a maximum of 3.5 percent each year without seeking voter approval.

However, if the county does not increase its tax rate above the no-new-revenue rate, it can bank what is called an unused increment that can be used at a future date based on the prior three years of “foregone tax revenue.”

Since 2021, the county tax rate has dropped from 43.91 cents to 20.32 cents in 2024, a decrease of 23.59 cents per $100 valuation as the county has only adopted the no-new-revenue rate each year and mineral and property valuations have jumped significantly.

This year, the tax rate will jump by nearly a third — 32.33 percent — because the county will be cashing in that unused increment to exceed the 3.5 percent cap and the county will have debt service to pay for the first time in seven years due to the bonds issued to fix the annex and Randle-Rather building.

However, since the new tax rate is at the voter-approval rate based on factoring in that unused increment, the county will not be required to hold a tax rate election, though it must hold a public hearing on the rate for residents to voice their opinions.

The average homestead taxable value has risen from $155,290 last year to $167,607 this year, which is an increase of 7.93 percent. By increasing the tax rate from 20.32 to 26.89 cents, the tax on the average homestead will increase by $135.15, from $315.55 to $450.70, this year, while the total tax levy on all properties will rise from $14,227,199 to $18,312,083, an increase of $4,084,884.

Retiree stipend removed

The $300 per month retiree stipend was part of a policy the court adopted in September 2024 to provide medical insurance to retired personnel before they reach Medicare eligibility, but that stipend only applies to 24 individuals at this time.

The policy allows for non-elected employees who are at least 58 years of age and who have had a minimum of 20 years working for the county to retire and receive full medical insurance coverage for themselves until they are eligible for Medicare at age 65.

Meanwhile, elected officials have to serve at least 12 years (three full terms) in order to be able to participate in retiree health insurance and also must have reached an age of attainment of 58 years.

If a retiring employee or county official is at least 58 and meets the qualifications, he or she can remain on the county’s health insurance policy and have the county pay 100 percent of the monthly premium up to the retiree is eligible for Medicare, provided they do not take a lump sum payment through TCDRS (Texas County and District Retirement System) but continue to receive monthly retirement checks.

Once a retiree reaches the age of 65 and eligibility for Medicare, he or she can be converted to a Medicare supplement plan and the county then pays $300 per month per qualified retiree to the retiree up until their death — or $3,600 per year per retiree. There are currently 24 retirees who are eligible and receive this benefit, which was expected to cost the county about $84,600 this first year.

The matter originally was brought to commissioners by then-Precinct 3 Commissioner Kevin La Fleur, who said he wanted to offer a benefit that would help the county attract and retain good employees while also getting rid of past practices where the county would pass a COLA (cost of living adjustment) that could tie up county funds for 15 years and cost hundreds of thousands of dollars.

On Monday, Davis said, “This was the one that the outside auditor basically told us that's something that we probably shouldn't have done.”

“He said it's not a good idea because it's something that you're going to be stuck with forever,” Davis added. “If there's more people that retire, then you're going to be stuck with that continuously. My deal is if we are able to give our retirees something, that would be great to give something to all of them, not just a very select few.

“It also does affect your bond rating, so if you got to go out and try to get some bonds — if we want to build a jail or whatever — it affects it. It affected our rating (on the annex bonds). We would have probably been a lot higher if we would not have had that (on the books).”

Davis, Precinct 1 Commissioner Tony Matias and Precinct 4 Commissioner Collie Boatright voted to rescind the stipend, while Precinct 2 Commissioner Donnie Brzozowski and Precinct 3 Commissioner Roy Staton voted to keep it.