On Tuesday, December 17, the City Council voted on the shift factor that set the tax rate for residential and commercial properties. For the first time in years, favorable shifts were presented and concluded a significant reduction of tax rates for both residential and commercial properties. However, the average single-family home tax bill will still increase by $304.16, or approximately $25 per month. This increase is primarily driven by rising residential property values, coupled with higher costs for insurance, schools, transportation, and contractual obligations:
- Increases in salaries through budget per negotiated union contracts.
- 2% COLA increases for non-union employees reflected in the Schedule A of the City Ordinances.
- Retirement: COLA increased by $291,762, totaling $12,563,043. The funding includes an increase from $14,000 to $15,000 in the COLA base for eligible retirees.
- Health Insurance: increased by $1,189,535, totaling $13,084,880.
- City Long Term Debt: reduced by $250,108. So in the current year budget, increases are not due to city debt.
- School Department: 13% Local Contribution Increased, totaling $22,887,823
- Required local contribution – $730,977 increased, totaling $13,183,748.
- HPS Transportation and Leases – $2,298,207 increased, totaling $10,435,052.
The City Council voted on the shift: $17.46 for residential and $38.54 for commercial. Currently, residential is $18.95 and commercial is $40.26. This adjustment will significantly reduce both residential and commercial rates while keeping the average single-family tax bill increase to a manageable level.
Despite some of the perspective shared by members of the council and community, we have made substantial progress together in how we manage our resources, and I am pleased to highlight the following accomplishments:
- No Use of Free Cash or Reserves: We are not relying on free cash or reserves to reduce the levy amount.
- Balanced Budget Without ARPA Funds: This year’s budget is balanced without dependence on federal ARPA funds.
- Conservative Revenue Estimates: By budgeting conservatively and collecting more local receipts than anticipated, we have strengthened our free cash position. This provides us with greater flexibility to address shortfalls and invest in critical capital needs.
I am looking forward to our FY26 budget planning and am committed to exploring strategies to alleviate taxpayer burdens in the next fiscal year.
Joshua A. Garcia, Mayor