(The Center Square) – As cities across Texas formulate tax rate proposals for the coming year, the Texas Municipal League (TML) is preparing a special edition of its fiscal condition survey that seeks to address the steep decline in sales tax revenue due to the COVID-19 economic downturn.
Although survey results are not yet available, anecdotal information suggests most cities plan to institute temporary service cuts rather than hiking property taxes to make up for lost revenues, Bennett Sandlin, executive director of the TML, told The Center Square.
“I don’t think it’s a sure thing that most cities will go up in property taxes,” Sandlin said. “A lot of citizens can’t afford their mortgages right now let alone higher property taxes, so I don’t think that’s going to happen across the board.
“This is different from a normal recession,” Sandlin added, “I can’t speak for them all, but a lot of cities philosophically just won’t.”
The plan for most is staff furloughs, salary freezes and limited service cuts, Sandlin said. Depending on location, some may choose to cut park or library budgets, while others may temporarily lay off department employees.
Last month, the Dallas City Council voted not to consider an 8 percent property tax increase, WFAA reported.
“I’m hearing anecdotally that cities will just kind of take it on the chin in terms of cuts to services,” Sandlin said.
As budget planners map out what to do, the TML hopes the new fiscal condition survey, due for release by June 26, can provide valuable information for cities that in some cases have seen an 18 percent decline in sales tax revenue.
For 25 years, the annual survey has been released in March; given the coronavirus pandemic impact, the TML decided to produce a mid-year edition, Sandlin said.
Cities must issue proposed tax rates by the Oct. 1 deadline, Sandlin said.
“Texas cities don’t get any state aid, we have zero, we’re totally self-reliant. We actually like that system, but there is no backstop from the state,” Sandlin said.
Another relief option could come at the federal level, with a stimulus package that includes relief targeted for cities, Sandlin said.