PHARR LOWERS PROPERTY TAX RATE

By G. Romero Wendorf

PHARR -- Good news for Pharr property owners – you’re now going to get to keep more of your money, thanks to the city commission’s decision to lower property taxes this coming new fiscal year, which begins Oct. 1.

“I think this is huge,” said City Manager Juan Guerra. “It’s the first major tax-rate reduction in the past 14 years.”

It may well be the biggest tax-rate reduction in the city’s history, but tax rates prior to 1993 weren’t readily available while this story is being written.

But here’s the breakdown: in 1993, the Pharr property tax rate (per $100 property valuation) was 57 cents. By 2002, that rate had shot up to 69 cents. Over the course of the next 12 years, 2014, the city commission had managed to drop it by a penny to its current rate: 68 cents per $100.

Now, it’s going down 2.6 cents: from 68 to 65.4.

In today’s challenging economic times, every penny counts, so while a drop from 68 cents per $100 property valuation down to 65.4 cents may not seem huge, for anyone counting their money these days (which accounts for most of us), any drop in taxes can be described as good news.

For a home valued at $100,000, the decrease will amount to an annual savings of $26, not counting exemptions. For a commercial property valued at $500,000, the ad valorem decrease will drop the property owner’s tax bill from $3,400 to $3,270.

Like they say, every penny counts these days.

This story is being written Tuesday (9/22). The Pharr City Commission is expected to approve the tax rate Wednesday during a special called meeting, according to Guerra.

During this past spring’s city election, the proposed tax-rate reduction was part of Pharr Forward’s slate. Three of its four members, including the new mayor, beat out the opposing slate, Pharr First, whose members included three incumbents.

The new mayor, Dr. Ambrosio “Amos” Hernandez, said the tax-rate reduction is welcome news for city residents.

“During this past election, it was said by some that this (tax rate reduction) couldn’t be done. But we did it. And we did it thanks to a united board of commissioners.”

The city’s water-and-sewer rate has also seen a reduction.

“We’ve already reduced it by three percent,” said City Manager Guerra. “That was a symbolic gesture on the part of the city to show that we’re serious about rate reduction.”

Currently, the city is analyzing water and sewer rates and matching it up with an engineering master plan analysis.

“The utility master plan will tell us if we can lower the water and sewer rates more than the three percent,” said Guerra, “and still do it in a responsible fashion. The city has hired an outside third party to audit our utility fund and couple that with a rate study, to ultimately determine what rate (amount) will work best for the city and its residents.”

The current water/sewer rate is $1.25 per 1,000 gallons of usage (not including the base rate).

Hernandez said that all of these rate reductions – property taxes, utility fees – show that his slate’s campaign promises weren’t hollow.

“We followed through with what we promised to do,” he said.

In an odd paradox, the welcome rains this past spring and this month, however, isn’t necessarily good for cities.

“It means less usage on the part of the public,” said Guerra. “Which amounts to less revenues.”

Meaning, it’s a matter of supply and demand. The more demand, the more revenue. The more revenue, the more means by which cities have to reduce overall water rates.

The property tax reduction, which will result in reduced revenues to the city, will be offset by bridge revenues, said Guerra.

Even with nearby McAllen’s Anzalduas Bridge expected to soon begin crossing commercial traffic southbound, which is expected to siphon some trucks from the Pharr/Reynosa Bridge, Guerra said the city’s analysis shows that sufficient funds will still be collected at the city’s bridge toll booths moving forward.

“The future with regard to city finances looks very bright,” he said.

“I know the mayor and city commission are excited, and so am I. For us, and for the city’s entire staff, touting what may well be the biggest property tax-rate reduction in the city’s history is big, big news in our opinion.”