By Mason Canales and Alicia Lacy
Killeen Daily Herald
House Bill 3613 added a section to the tax code that gives veterans living with service-related physical and mental disabilities a complete exemption from their property taxes.
While the bill is beneficial to military veterans, it will also have an impact on city budgets. But much of that impact is unknown as county and city officials are still preparing for the effects the new bill will have on their budgets.
Coryell County Judge John Firth said he welcomes the new bill. "I welcome the opportunity to support the disabled veterans. Although it's small, I think it's appropriate to give tax advantages to disabled vets."
"The leadership in Coryell County welcomes this, but we as elected officials have to find other opportunities to lessen the burden on taxpayers," Firth added.
Firth believes the bill will make a difference in revenue for the county, estimating about $100,000 in lost revenue, but said he will have to wait for official numbers from the Coryell Central Appraisal District, which won't be known until July 25.
Firth said the county is in the process of exploring other options to help offset the expected change.
Copperas Cove City Manager Andrea Gardner said the loss of property tax revenue and the impact the bill will have on next year's city budget is unknown.
Because of the new bill, there is potential for an increase in population in the Central Texas area because of Fort Hood and its proximity to Veterans Affairs Hospitals in Temple and Waco.
"The possibility exists for an increase in population if Texas is the only state offering such an exemption," Gardner said.
"We won't see a decrease in population," Firth said. "We're prepared to expect that as disable veterans see that Texas doesn't have a state income tax and no property taxes for them."
Because the CCAD's software has not been updated, Chief Appraiser Mitch Fast said the dollar amount modification wouldn't be known until Friday. "We don't know how much it will take out because many properties already have exemptions."
Harker Heights officials say HB 3613 will effect the city's pocketbook but see the tax break as a good cause.
"It has potential to exempt quite a bit of property tax," said City Manager Steve Carpenter.
The city has been working to establish estimates on just how much the tax cut for veterans will effect the city's revenue, but has to wait to get more information from the Bell County Tax Appraisal Office, said Alberta Barrett, Harker Heights finance director.
It should take another couple of weeks, Barrett said.
Harker Heights is anticipating an average increase on property values by about five percent, which will increase property tax for some, but with this new exemptions the cities property tax revenue is still unknown, Carpenter said.
"We will be OK," Carpenter said. "We will just change a few things in the budget," he added.
It is too early to state what those changes could be, Carpenter said.
The city staff is still planning giving the budget to the City Council for review and discussion on July 23, even with the late coming changes, Carpenter said.
"I think you are giving an exemption, disabled veterans are the ones you give it to," Carpenter said. "Even if it has an impact on us, it is still something they deserve."
Like their counterparts in other cities, Killeen officials are unsure what the impact of the bill will be on the city budget. City Manager Connie Green said he would have more information next week after he receives updated records with information about the number of disabled veterans in the city who might qualify for the tax exemption.
Nolanville officials believe HB 3613 will drastically effect their budget, but believe veterans deserve the break.
"I have a mixed feeling on (the tax amendment), as an individual I think it is a good thing. I think the people deserve it," said Nolanville Mayor Emma McCullough. "When I put my mayor's hat on, I see what the effect is going to be on my city, and I get mixed emotions."
Nolanville's main source of revenue is property taxes, and this could really lessen that revenue source, McCullough said.
"Basically, we do live on the property taxes," said Councilman Ken Miller. "It is 90 percent of our revenue if not more."
Other cities can relay more on their taxes from businesses, and Nolanville cannot, McCullough said. There aren't as many businesses to tax.
Miller and McCullough were split much the city's budget would suffer.
McCullough thought it would suffer a lot because she believes the City Council is an accurate representation of the city's demographics, and five out of six officials qualify as 100 percent disabled, she said.
Miller thought the city's growth has changed the median age, thus leaving few veterans in Nolanville, he said.
"I don't think (the reduction of revenue) is as big as some people think it will be," Miller said.
Nolanville is currently uncertain how many residents will be claiming the exemption, and it is waiting on the Bell County Tax Appraisal Office to give it more information, McCullough said.
The officials were pretty certain, however, its property tax revenue would decrease unless other tax changes were made.
The city is already have budget problems this year, and this could make next years budget even tighter, McCullough said.
"We are in a budget crunch now, and it is only going to get worse," Miller said, before admitting that he and his wife both pushed to get the amendment passed.
"I am not unhappy that the house bill passed, I am just going to have to figure out another way to keep my city going because the house bill passed," McCullough said.
If you missed part one of this three-part series on House Bill 3613, read it online at kdhnews.com.