The protests, fueled by escalating property values driven by a thriving real estate market, saw island owners contesting approximately 60 percent of proposed valuations for the upcoming tax year.
Galveston’s tax base is set to take a significant hit of around $160 million due to a surge in tax appraisal protests
As a result, the city’s general fund revenue could suffer a blow of up to $700,000, according to administrators. During a recent workshop, the city’s finance department presented funding projections to the city council, highlighting the imminent funding challenges that City Manager Brian Maxwell labeled as unsustainable. The growing public safety budget, which consumes a substantial portion of the general fund, compounds the problem. Additionally, stagnant sales tax figures for the current year compared to the previous year further exacerbate the situation.
The most recent appraisal for Galveston revealed a 2 percent increase from the previous year, primarily due to new construction. The total value amounted to approximately $339 million, excluding around $86 million already approved for protests. As a result, the city’s taxable value stands at approximately $252 million, significantly impacting potential tax revenue.
The $86 million reduction in taxable value could lead to a loss of roughly $382,000 in ad valorem tax revenue for the city’s upcoming fiscal year, affecting various sectors such as public safety, infrastructure, streets and traffic, and parks.
These projections do not account for requests from city departments, emphasizing the financial strain faced by Galveston
Initially, city staff projected a $250 million loss in taxable value, which was later revised to approximately $160 million following a dispute by Galveston County Chief Appraiser Krystal McKinney. Such a loss would result in a revenue reduction of about $700,000.
The contentious issue in Galveston revolves around the total value of taxable property within the city’s jurisdiction. This figure, when multiplied by the city’s tax rate of approximately 44.5 cents per $100 of taxable value, determines the expected property tax revenue for the next fiscal year. Consequently, a higher base value translates into increased revenue. The city staff report estimates ad valorem property tax revenue to reach approximately $33.9 million for the year.
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