By James Clark | email
LUBBOCK, TX (KCBD) – Did you know the City of Lubbock charges you for property tax on your tap water? It's the same for garbage collection, stormwater, sewer, and electricity. The city will charge itself more than $5.4 million in property taxes in the coming year, up from $2.9 million in the current fiscal year. But of course, City Hall does not pay that tax bill. You do.
Lubbock Power & Light was allowed an exemption from PILOT or payment in lieu of taxes ever since its financial meltdown in 2003. But starting in the 2010/2011 fiscal year, LP&L will pay more than $1.4 million in property taxes.
Comparing Lubbock To Other Cities
KCBD NewsChannel 11 called other West Texas cities. Every city we successfully contacted charges a franchise fee. However PILOT is less common. "We do not have any PILOT programs," says a spokesperson for the city of Midland. No payment of in lieu of taxes? "No, sir" she says.
Plainview had a similar answer saying it has a franchise fee for services like water & sewer but not PILOT.
"We do not charge a property tax," says a spokesperson for Amarillo. But Amarillo was quick to point out it charges an administrative fee against its own departments such was water and sewer. The fee covers the cost of accounting, use of the H.R. department and other costs.
Likewise Lubbock also charges an administrative fee or "indirect cost," which totals about $2.3 for water, sewer, stormwater, garbage, and LP&L.
Odessa does charge PILOT against the estimated value of its own water lines, sewer lines, etc. "That's no different than what any private company would pay," says a spokesman for Odessa.
Add Franchise Fees To Those Taxes
In addition to charging itself property taxes, Lubbock's franchise fees for water, sewer, storm water, garbage collection and LP&L are $11.7 million. That number does not include franchise fees paid to Lubbock by Suddenlink, Atmos Energy and other private companies.
If the city of Lubbock were to refund the PILOT, and franchise fees paid by its own departments, the amount of money would be (based upon the number of water meters in Lubbock) enough to refund more than $217 per year to every business and household in Lubbock.
Mayor Agrees With PILOT Practice
Don't hold your breath on that refund. Mayor Tom Martin says, "It's a long standing thing we've been doing in Lubbock going back at least 30 years."
"Utilities could be privately owned," Martin continues. "And if they were private operations they would be paying property taxes." Martin says that years ago the justification for PILOT went something like this; "It puts public utilities on the same playing field as private enterprises."
"I agree with giving non-home owners [renters] a chance to pay their share of government and not placing the entire burden on the home owner's property tax bill."
Martin goes on to say that landlords cannot always fully recover the cost of property taxes from rent payments. "We have a city where in previous years the numbers showed between 40 and 50 percent of the housing came from rental units."
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