While everyone is heaving a sigh of relief, it still means the City of Wylie has increased our taxes.
Whaaaa? How's that?
There's this little thing called the effective tax rate. When the effective tax rate is announced by Collin County Central Appraisal District (CAD) on August 7th, the city of Wylie should replace our current tax rate by adopting the recommended effective tax rate, instead of gouging existing homeowners.
You see, there is money that existing homeowners pay into the pot. That is what the taxing entity's, Wylie's in this case, budget is based upon. It doesn't take into consideration taxes to be earned on new builds. When the city keeps the rate the same, they are double-dipping by collecting money from the existing tax base while also collecting new revenue from new properties added. It's partly the reason we had a nearly 3 million dollar excess from last year's budget. That, and the continued increase in sales tax revenue.
By adopting the effective tax rate, it will not result in budget cuts, layoffs, reductions in services or lower our bond rating or our ability to repay debt, as they always threaten. Instead, it means growth would pay for itself as the tax revenue needed to cover services these new properties demand are covered by themselves rather than double dipped from current taxpayers as their property values increase.
Let's break this down into simpler terms.
You have 100 sheep. You pay 50 sheep to Wylie.
The new neighbor who just built their home this year has 100 sheep and needs to pay their own 50 sheep to Wylie.
Wylie gets 100 sheep total from you and your neighbor.
Appraisal values increase which means you would now have to pay 80 sheep to Wylie.
Your new neighbor has to pay his 80 sheep too.
Wylie is excited because they are now going to be getting 160 sheep! Holy sheep shit!
But people start to grumble, and Wylie's blogger begins to point out what is really taking place.
Now lets say that Wylie wants to give you back some of your sheep as a little break because they realize how bad it looks for them to have 160 sheep in such a dramatic increase.
So instead if 80 sheep, you pay Wylie 60 sheep.
Your new neighbor pays 60 sheep too.
Now Wylie claims they have helped you out by lowering your sheep rate but instead of paying the original 50 sheep, you are now paying 60 sheep. It's still an increase, folks.
Oh sure, paying 60 sheep is better than the 80 you might have had to pay, but Wylie has just increased their sheep count from you and your new neighbor from the original 100 last year to 120.
Wylie should lower your sheep required back to 50 because they are already getting the 50 additional sheep from your new neighbor, which should cover their share of necessities like road use, fire and police protection along with reasonable expenses. But Wylie likes to tell you that adding new properties means everyone must pay more sheep to cover the cost of these new properties. NO, NO, NO! The new property owners are covering their own costs when they start paying into the system!
According to the Texas Comptroller's office, when property values increase, and cities keep the tax rate the same, by definition it is considered a tax increase. When Wylie's tax rate increased 7.47% based upon property values, the two cents Mayor Hogue suggests we are given back only correlates to a 2.3% reduction. This means Wylie is moving forward with increasing your taxes by 5.17%.
It's a game, folks. Though it is certainly admirable that our mayor agrees our taxes are too high and he wants to lower them from the ridiculous 86.89 cents to 84.89 cents, it still means our city administrators are toying with the increase in property values bestowed upon us by Collin County CAD as well as the excess retail sales revenue and taxes on new property builds taken in above last year's budget. Plus, they'll rake in even more in the coming year.
For taxpayers, it is a lose-lose situation that council members don't seem to understand as part of their fiduciary responsibility to not only the city, but also the taxpayers; and administrators hope they never figure it out.
Where do you think this excess money is going, anyway? They're spending it on salary increases, improved benefits, and larger expense accounts. They are having a field day while they screw you and your 100 sheep.