Mayor ready to rebuild city budget via appraisal hikes

June 3, 2014 at 1:03 a.m.
Updated June 4, 2014 at 1:04 a.m.

Higher appraisal values this year in Victoria are not necessarily all bad, Victoria Mayor Paul Polasek said Tuesday.

He said city officials are counting on the increased revenue from higher property appraisals to fill some of the lingering financial pothole in Victoria's street maintenance fund.

Polasek spoke to the weekly Victoria Partnership meeting hosted by the Victoria Economic Development Corp.

He said he doesn't think the city needs to raise its taxes because the total growth in taxes paid may generate enough revenue to start budgeting for a 10-year plan to cover street maintenance.

Polasek and the City Council are scheduled Thursday to begin discussions about the city budget, including how they will fund overall capital improvement projects.

"There's a massive misunderstanding," Polasek said during his presentation, explaining how "artificially low" appraisal values before the last decade kept money out of the city's budget. "Officials in the past weren't honest with the funds and revenues."

With more tax revenue expected, Polasek said, "now, we're finally catching up."

However, many property owners are upset by the higher appraisals and are expected to contest home values this year. The deadline to file a protest is midnight Friday.

Polasek said he is aware that some property owners are not happy with the higher numbers. To emphasize the point, he used his own appraisals to show how he also has experienced a sharp increase in his home and business property appraisals.

For his downtown business property, he showed that there were a few instances when the values drastically increased and other times plummeted before the valuations eventually were adjusted closer to market value, he said.

Victoria County Judge Don Pozzi, who attended the meeting, said efforts by Polasek and other city leaders to keep the tax rate low also contributed to Victoria's lack of enough revenue. In his talk, Polasek said getting the tax rate under 60 cents was a goal he was proud of.

"It certainly makes you look good when you make cuts in the tax rate, but eventually, someone is going to have to pay for it," Pozzi said later Tuesday. "But your taxable values are going to level out, and when they do, you have certainly lost a lot of income that could have gone toward the streets and repairs."

Pozzi said he is unsure whether the city's present structure will give officials the funding they are looking for. It'll be a few months before the city knows exactly how much it will receive, he said, and how much each taxing entity will collect.

He commended the mayor for his presentation, calling it accurate and factual. Polasek's willingness to show information regarding his property was important also because it's something Pozzi said Victoria residents are experiencing.

Polasek's presentation showed property values between 1998 and 2005 as artificially low compared to market value. Between 2005 and 2006, a new appraisal director was hired, which was about the time that values started climbing.

"It explains why we are behind in our streets," he said. "We don't have the revenue."

Because the values were so low in the past, Polasek said, the more recent changes in taxes, including a statewide audit of appraisal districts, have started to catch Victoria up to where it should be as far as revenue concerning city projects, such as street and utility maintenance.

Lynn Short, public works director, said the city's 10-year street funding plan is a way to maintain streets in good condition so they don't fall into disrepair that requires them to be rebuilt.

The 10-year plan would use about $2 million annually for maintenance and would take on debt through bonds through 2024.

"Aging infrastructure is a real problem for most U.S. cities," he said. "In the past, we have not replaced or rebuilt infrastructure as soon as we should have."

Polasek asked the Victoria Partnership group to work together and support what he and the City Council are doing.

"If you disagree with the appraisal, come down and say so," he said. "We want this system to grow and be progressive."



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