Is the Timing Right for Proposed Tax Cuts? - KCBD NewsChannel 11 Lubbock


Is the Timing Right for Proposed Tax Cuts?

On Tuesday, we told you that Interim City Manager Tommy Gonzalez is looking at eliminating jobs, cutting back on employee benefits, and some services may have to be streamlined. There's a number of things he's considering in order to balance the budget.

Gonzalez is having to look for ways to cut back because the city is not getting its $7 million cut from Lubbock Power & Light, the city owned utility operation, which is also in the hole.So now, proposed tax cuts ?

Tom Martin says there's never a bad time to cut taxes. But will this have any affect on city services? NewsChannel 11 asked that question.

Just one piece of paper is causing quite a stir at City Hall. It was drawn up by Councilman Gary Boren proposing tax cuts to offset "inappropriate, unfair, and ridiculously high property values." Both Boren and Councilman Tom Martin think a one to two cent reduction is needed to offset the inflated property values.

But Councilman Victor Hernandez says that's a big gamble for a city that has to cut spending. That means the city will lose a little over $1 million dollars a year. "They're gambling with the city's future, they're gambling that gas prices won't go up and hoping gas prices will go down. They're gambling that LP&L will turn profit and they'll be able to make ends meet with the lower tax rate. And if it doesn't, we're not going to talk about 100 jobs, we'll be talking about more," said Hernandez who thinks the resolution is more of a political posturing tactic.

More or less, Hernandez is concerned the tax rate cut will affect city services. But Tommy Gonzalez says that's not totally true. "The objective is not to impact services adversely. In some areas it we be impacted," Gonzalez said.

But let's get down to it and cut through the politics. What does a tax rate cut mean to you?

Let's say for instance, you own an $85,000 house. The tax rate is .57 cents per $100 valuation. Right now, you pay $484 a year in property taxes to the city. Now, if the taxes are cut by two cents, you'll be paying $17 less a year.

That doesn't seem like a lot of money, but Martin says it's money the government won't be spending. This cut, Martin says, can work and the timing is right. Because new construction is generating around $2 million for the city of Lubbock. "What we're saying is that $2 million from new construction is good. We need the money to operate. We don't need to stack another $2 million of inflated property taxes on top of it. We need to bring the property tax rate down by around two cents to offset that. We still have $2 million in new revenue available this next year," explained Martin.

This resolution has the support of four councilmen and at least two are opposed. The proposal will be presented to council in a special meeting on Monday, July 7th.

Powered by Frankly