City of San Antonio officials are forecasting a $13.2 million budget surplus for fiscal year 2018, but recommended to City Council on Wednesday to save that money for next year.

In previous years, these mid-year budget adjustment conversations led Council members to choose to fund a struggling or new program, as they did in May 2017 by funding legal help for immigrants and other vulnerable residents and May 2016 with a $375,000 boost to San Antonio Pets Alive, an animal rescue organization.

While the economy and City revenues are relatively strong now, save for a slight-yet-unexpected dip in sales tax revenue, that could change by the end of the fiscal year, said Assistant City Manager Maria Villagomez.

Council agreed and discussed a wide range of priorities for fiscal year 2019. Those goal-setting meetings begin on May 30 and are open to the public. The City also has launched its SASpeakUp campaign, online and in the community, to capture public input on which services should receive more, less, or the same level of funding.

Property taxes were the subject of much of the conversation Wednesday. The average home value in Bexar County increased by 8.8 percent this year, according to preliminary estimates by the Bexar Appraisal District – but some homeowners may experience as much as a 40 percent jump in valuations, triggering higher tax bills.

Councilmen Clayton Perry (D10) and Greg Brockhouse (D6) suggested that the city should provide relief by adding a homestead exemption for San Antonians’ primary residences in addition to the exemption the State provides. Perry and Brockhouse initially suggested such an exemption during budget discussions last year.

The cities of Houston, Austin, Dallas, Fort Worth, El Paso, and Corpus Christi offer tax exemptions that range from 1 to 20 percent, Brockhouse said, adding that he’s “embarrassed” that San Antonio does not offer one.

Tax rates and local option exemptions for Texas cities in 2018.
Tax rates and local option exemptions for Texas cities in 2018. Credit: Courtesy /Ci

Those cities have different budgets, tax rates, and other discounts than San Antonio, said Ben Gorzell, the City’s chief financial officer. San Antonio, Fort Worth, and Corpus Christi, for instance, offer a tax freeze for senior and disabled residents.

The benefit to the taxpayer could be anywhere from $27 annually, on a $100,000 home valuation with a 5 percent exemption, to $558 per year, for a home valued at $500,000 with a 20 percent exemption, Gorzell said. Homeowners could save between $2.25 per month and $46.50 per month. Meanwhile, the city would forgo substantial funding for its administrative and public services – $6 million to $44 million, he said.

City staff performed an analysis on the fiscal impact a local homestead exemption would have on the City's general fund and debt service.
City staff’s analysis on the fiscal impact a local homestead exemption would have on the City’s general fund and debt service. Credit: Courtesy / City of San Antonio

“I don’t see that as a reason to hold back offering help for people in San Antonio,” Perry said. He argued that any tax relief, no matter how small, would help. It’s the “number one” issue that his Northside constituents come to him about, he said.

The City collects 22 cents of every property tax dollar; the rest is collected by Bexar County, the Alamo Colleges District, independent school districts, the San Antonio River Authority, and other agencies. The City has no control over school district tax rates, said City Manager Sheryl Sculley, that continue to rise to make up for lost revenue from the State.

Mayor Ron Nirenberg and council members Roberto Treviño (D1), Rebecca Viagran (D3), Rey Saldaña (D4), Shirley Gonzales (D5), Ana Sandoval (D7), Manny Pelaez (D8), and John Courage (D9) spoke against the local homestead exemption. Councilman Cruz Shaw (D2) did not attend the meeting.

“If they want tax relief, let’s be honest about where you can truly find that,” Saldaña said, noting that would be at the state level. “It’s the folks that have 500,000 homes that really get the biggest relief” from homestead exemptions.

Alternatives to homestead exemptions include neighborhood empowerment zones where residents can receive a rebate for improvements made to their homes, or other more targeted property tax discounts, but the latter would require changes at the state level, Gorzell said.

Viagran and others said they would like to see the City advocate for those changes.

City staff took notes during the discussion, which included conversations about increasing the street repair budget, incentivizing residential use of smaller trash bins, sidewalks, and other budget issues. Those notes will guide staff’s preparation for the budget meetings in May.

Iris Dimmick

Iris Dimmick

Senior reporter Iris Dimmick covers City Hall, politics, development, and more. Contact her at iris@rivardreport.com