White Settlement may have to raise its property tax rate to offset a 16.4 percent drop in property values and avoid cutting jobs and services, the city manager said this week.
During a budget workshop Tuesday, City Manager Linda Ryan told council members that she is recommending that they adopt an effective property tax rate of 82 cents per $100 of assessed value to avoid layoffs and other cuts. The current property tax rate is 68 cents.
Ryan said she is working with the Tarrant Appraisal District to get an explanation of the 16.4 percent drop in property values, the biggest in Tarrant County. The decline is due in part to one company, Weir SPM Flow Control, which reported an inventory loss and claimed an $18 million freeport exemption.
Another factor is declining residential and commercial values throughout the city. Ryan said many home values declined by about 10 percent, but in one instance, a homeowner's value went down by 30 percent.
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Ryan pointed out that most property owners probably won't pay more in taxes because of the lower values.
"It's just bad right now," she said.
Ryan presented a proposed operating budget of $7.9 million for fiscal 2010-11 based on a property tax rate of 77 cents. However, the proposal includes laying off two full-time and two part-time employees and freezing several positions, including an assistant city manager.
Ryan emphasized that layoffs could be avoided with the 82-cent effective tax rate.
Several council members asked about cost-cutting measures such as reduced library hours and furloughs for employees.
Councilman John Giddens asked about cutting the library staff and hours. Ryan said she does not want to see cuts in services.
"We have to understand how the library is used," she said. "As people lose their jobs, they've lost the ability to go online [from their homes]. When you cut hours, you're going to cut availability. Those folks are going to ask why."
When asked about furloughs, personnel director Mark Huff said it is important to keep employees on staff.
"Last year, Fort Worth furloughed employees. This year, employees organized," he said.