The May 2020 municipal election and a possible tax swap are on tap for the Killeen City Council meeting on Tuesday night.
On the Killeen City Council’s consent agenda is the call for the May general election date along with placing an item on a special election ballot on a possible tax swap — changing a portion of the city’s sales tax designated for property tax relief to general government purposes.
Property tax relief is an additional sales tax that may be imposed by cities, and its revenues are placed in a city’s general fund.
At last week’s workshop, interim City Attorney Traci Briggs went over staff recommendation to allocate 0.5% of Killeen’s sales tax for property tax relief to city general government purposes as it “will prevent potential revenue loss due to a new state law,” she said.
The new legislation titled Senate Bill 2 is also known as the Texas Property Tax Reform and Transparency Act of 2019.
The intent of the bill, which took effect on Jan. 1, is to reduce the ceiling for year-to-year property tax revenue increases.
Due to the property tax relief sales tax adopted by voters in 1990, the new law would impact Killeen by reducing the city’s revenue.
“The property tax relief portion of the city’s local sales tax reduces the rollback rate ceiling by approximately 13 cents, which this year would have reduced the rollback rate below the city’s current tax rate, resulting in an estimated revenue loss of $1.1 million,” Briggs said in a staff report.
Hilary Shine, Killeen’s communications director, said the action will not “change the current sales tax rate or property tax rate.” She said the vote could prevent a reduction in revenue created by the new law.
All proceeds would remain in the General Fund, which pays for parks, public safety, libraries and general city operations.
“For FY20, Killeen could have raised its property tax rate to 75.88 cents per $100 valuation under the 8% percent cap; however, it maintained its 74.98 cent rate,” Shine said on Jan. 21. “Under the 3.5% cap, the rollback rate — now called voter-approval rate — would have been lower than the current tax rate, resulting in Killeen losing $1.1 million.”
The 3.5% cap will become the new revenue ceiling beginning in fiscal year 2021, which starts Oct. 1.
Texas’ maximum sales tax rate is 8.25%, 6.25% of which is kept by the state. Locally, Killeen receives 1.5% and Bell County receives the remaining 0.5%.
In other matters regarding the May 2 municipal election, the mayor’s post and three at-large seats will be on the ballot.
According to the Texas Election Code, Chapter 3, the city council has to order an election “no later than the 78th day before the election date.”
Current Killeen Mayor Jose Segarra, who was re-elected in May 2018, told the Herald on Jan. 2 he is seeking reelection.
At-large seats held by Juan Rivera and Gregory Johnson are up for grabs. Neither is seeking reelection. Rivera is termed out and Johnson is challenging incumbent Daryl Peters for Bell County Justice of the Peace Precinct 4, Place 1, position in the March primary election. Peters is seeking reelection, according to the Texas Secretary of State election website. He filed on Nov. 20, 2019.
Butch Menking, who is in his first term as a Killeen councilman, is seeking reelection, according to city staff.
So far, three Killeen residents — Mellisa Brown, Carla Escalante and Leo Gukeisen — have filed to be placed on the ballot.
The last day to file for the city council election is Feb. 14.