EDINBURG — The council here increased the 2020 fiscal year tax rate by nearly 9% last week.
But Edinburg’s 8.64% tax rate increase is due in large part to the $30 million in bonds residents overwhelmingly approved last year via an election.
Those bonds, which are meant to fund drainage and roadway improvements, were supposed to lead to a 5-cent tax rate increase, taking the 2019 rate of 63.5 cents per $100 valuation to 68.5 cents. That would have been a 9.44% increase.
The council was initially poised to take that action during a regularly scheduled meeting Sept. 17, but Councilman Gilbert Enriquez stepped in and suggested city staff study the issue further in order to find ways to cut the increase.
“Did we even entertain lowering the (maintenance and operation budget) by half a penny, a penny — just something so we can alleviate the burden of the 5-cent increase to the taxpayer,” Enriquez asked Edinburg City Manager Juan Guerra.
Guerra responded that the city had been operating for years as if it were financially broke, and said he did not recommend cutting the proposed 5-cent increase.
“The city has an antiquated fleet system — that’s without saying,” Guerra said. “We have inefficiencies that we’re identifying and trying to fix. Our fire department currently is operating with a vehicle 40 years old, which is not acceptable for a community this size, with the resources we have.”
Instead, he suggested, a reduction should be considered for fiscal year 2021.
“This year, we were looking to catch up on a lot of the deficiencies that this city has because for several years they’ve been managing the city as though it was broke,” Guerra said. “And the reality is, this city is fiscally strong and healthy thanks to a lot of the development that’s taken place.”
“Right,” Enriquez replied. “And I’m not disputing that, because I ran on reinvesting back into infrastructure, and public safety, and parks and rec — I’m all for that. But that doesn’t mean I want you to spend all the money … (or to have) an open checkbook to pay for anything.”
Edinburg’s taxable values grew by more than 7 percent in 2019, and that growth should equate to a reduction in taxes, Enriquez said, adding that Guerra, as city manager, has a duty to run the city efficiently.
Guerra then referenced his background with Pharr as proof he is fiscally conservative.
“When I was the city manager for the city of Pharr, what we did every single year was lower the tax rate. As a matter of fact, this year they might be increasing it, but we lowered the tax rate,” he said. “So my philosophy is a conservative one, and I bring that here to the city of Edinburg.”
When it finally came time to vote on the issue, the council was split evenly along majority lines, with Enriquez and councilman Homer Jasso voting against the 5-cent tax rate increase and Mayor Richard Molina and Mayor Pro Tem David Torres voting in favor.
Councilman Jorge Salinas, who usually votes in line with Molina and Torres, was absent from the meeting, so the motion failed in a 2-2 deadlock.
The council met once again for a special-called meeting last week, and by then, the mayor was onboard with reducing the tax rate increase from 5 cents to 4.5 cents.
That half-cent decrease would amount to a revenue loss of about $400,000, Finance Director Dagoberto Soto said.
Enriquez, however, wanted to provide more tax relief for Edinburg taxpayers.
“I think we can do a penny, mayor. Don’t you,” he asked Molina.
“We’ll have to cut the pay raises for the employees,” Molina replied. “I disagree with that. I want to give them a pay raise.”
The mayor also said he wanted to give Guerra, who was still against the reduction, some financial leeway.
“I think we can start nipping away a little bit, but I’m not going to handcuff him, completely,” Molina said.
“We’re moving in the right direction,” he said, adding he would support a tax rate reduction next year.
The council eventually approved the 4.5 cent tax rate increase, with all but Jasso voting in favor.