In a brief special meeting Tuesday evening, the Katy City Council approved increasing the city’s tax exemption for elderly and disabled residents by $10,000.
The vote raises the exemption from the current $30,000 level to $40,000.
The measure was approved on a unanimous vote of the council members in attendance. Councilman Kenneth Berger was not present for the meeting.
The final vote came following an extended discussion during last week’s regular council meeting during which council members debated whether or nor the timing was right to increase the exemption.
During last week’s meeting, Finance Director Byron Hebert presented his analysis on what impact increasing the exemption would have on the city’s budget. He presented figures that showed the cost in lost revenue if the city increased the current $30,000 exemption to $40,000, $50,000, $75,000 or $100,000.
Hebert prepared the analysis at the request of Mayor Don Elder and several council members. He stressed, however, that the financial picture had changed dramatically since he was first asked to conduct the review.
“Back at the time we initiated this, the (economy) was more robust,” Hebert said.
His analysis showed it costs the city $162,170 in property tax revenues to extend the $30,000 exemption. Raising the exemption to $40,000 per year will increase the cost to the city by an additional $57,371.
Increasing the exemption to $50,000 would have cost the city an additional $112,256, to $75,000 an additional $249,469 and to $100,000 an additional $386,682.
Councilman Larry Gore said he would like to see the exemption increased as a way of helping Katy seniors and disabled residents, even if that meant tightening the city’s belt.
“I think we ought to do something for the seniors. Government can always find ways to spend money; we need to see if we can find way to cut spending,” Gore said.
Gore added he would like to increase the exemption to $100,000 if it was fiscally possible.
Other council members struck a more cautious note.
“Our outlook today is a little different from when we started to look at this,” Councilman Hank Schmidt said. “I just am really concerned about next year’s budget.”
As last week’s discussion wound down, Elder said he could see the city increasing the exemption, but only a small amount at this time.
“I could see (increasing) it by $10,000, if anything,” Elder said.
He pointed out the city could always reconsider the exemption amount when the economy stabilizes.
The council then voted to direct City Attorney Joe Hegar to draft an ordinance increasing the tax exemption by $10,000. That ordinance was the one approved during Tuesday’s meeting.
Upon passage of the measure, Gore again suggested the council reconsider raising the exemption when the economy improves.
By: John Pape on Wed, Jul 1, 2009
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