Travis County Commissioners Court
July 1, 2008
Item 22
22 is to receive and discuss as necessary the second revenue estimate for the fiscal year 2009 budget process. And then we'll take up 8 next.
>> good morning, judge, Commissioners. I'm from the auditor's office. Briefly today, we have the second revenue estimate for you for the fy '09 budget process. It's the first one that has almost all the funds. It doesn't have the internal service funds but it has all the other funds. The tax rate in this remains at 40.69 cents, which is 2.05% above the effective tax rate and that's what we used in the first revenue estimate. And we have continued to use 97.5% as our estimate of cash collections for the first few. We have not, of course, yet received the final assessed valuation. That is not due until July 25. We think the av that we have in this one is pretty close, and it would be very close for the third revenue estimate, if we haven't gotten it before that estimate, it's due to be out on the 21st. The general fund is $433.5 million, of which 52.8 is your beginning balance. That's a little less than the, the total is a little less than we estimated in the first revenue estimate but it is fairly close. The m&o portion of the tax rate remains at 33.33 cent, which is.82 cents above the m&o effective tax rate. At this time, early in the process, there is still some contracts we're not sure about. We usually find out about later in the process or in some cases we certify mid year when they come in, so if you look at some departments and some categories in the general fund they tend look a little low at this point. That is sort of the nature of the beast. The debt service rate is at 7.63 cents and that is down from the current year's 8.11 cents, that is down about 3/4 of a cent. And I would be thrilled to introduce to you a brand new fund which we are required to create because we found a statute we had not seen before. There is a new fund called the health food permits fund, which was two or three revenue line items that had to be broken off the general fund and put into a separate fund. We would hate to bring you a revenue estimate if it didn't have a new fund in it because I know you would like to see the numbers of those grow. I would be glad to answer any questions you have on the second mat. -- second estimate.
>> I would talkly roy, I guess, with some of the funds that were actually in this. I didn't really know what that fund was and I just kind of questioned it a little bit. And did get an analysis of the revenue that was actually in that particular fund. And because it was not really apar rant. You went through the back-up, looked at it, it wasn't really apparent as far as the money that was in there. I don't have no problem with it.
>> we're glad to answer any questions you have on any particular fund.
>> right. No, I had my question answered: I had to, because there wasn't anyway to show exactly what was leaf leaf, -- what was left, the amount of money in that fund. But anyway, I got my question answers.
>> it is expensive because you're separating that out and budgeting those. If a group comes in and they want money dedicated to whatever they want to do so they get the legislature to pass law which restricts the expenditure of that revenue then you have a special revenue fund, and, you know, there are a lot of them, but but that's how they come about that we have that. The other thing at this point we're working very hard at looking at the tax role, obviously. We're talking to the new chief appraiser, and verifying the methodology he uses to assess. We think we're pretty close to, we're pretty close to being on the money on this one. There are a lots more protests, a lot more property value and protests than in the past significantly larger number, which is not really surprising. Some of those are very large commercial properties, which will make a big difference in terms of how they go. One of the things in difference in methodology, and I think in a work session I need to do about a 20-minute deal for you on, it but one of the things that in terms of methodology is the law requires us to use the role assertified by the chief appraiser. And in this government, we have always known that 100% of that will not come in for numerous reasons. One of the reasons is that people have protested their value, and the value goes down. Some of those protests are handled, most of them really probably are handled by August. But those that are litigated and those tend to be the bigger one, those can go on for years. And a lot of those that are litigated, they keep paying their taxes but if, in fact, the appraisal district loses and they reduce the value of their profit and we have to repay them because they have overpaid. We try to guess what that is going to be. We estimate what we think we will lose in protests in litigation and also those that have been paid that were going to have to refund. It is our information that some of that was netted out by the last chief appraiser and that's not happening now, so what was happening is he gave a very conservative number because, instead of giving us gross, he did his deductions and gave us a net number and that's why for several years we were getting a big fund balance windfall because we were estimating revenue was really coming in at more than 100%, that's why, because it with was netted downd this chief apricer is not doing that so -- appraiser is not doing that some of don't worry about the percentages, it is really the methodology in what we're looking at so we're looking at what he thinks he is going to appraise. We've spent a lot of time with him and will spend more on what he thinks, we'll know what we've lost in protests by July 25, but if they still start settling them through August, then he will estimate that, we'll talk to him and estimate that amount. And then the second part of that is, once it's accurately billed and not protested, then what percentage of that do we collect. So those are two different parts of it. And there is no doubt, I mean, you've seen the articles in the paper and that, that the property values went up and some people don't feel that they really went up because homes are not selling for that. So there is a lot of talk and noise in the system and the worse thing that we could do is overshoot that thing for 5 or $6 million, because, again, we only estimate the revenue as best we can, we can't make it come in so we're trying to give you the best number that we can. The methodology that we used this year appears as though, as see from this is tax revenue is going to come in pretty much on the money so we're not going to come in shorter, materially shorter than we thought or more than we thought. It is pretty welcoming in where we thought. You know, where we are, then we have to figure out next year. But we're not in a crisis with the tax revenue. This is the first year, is it not, blaine, we will be saving $2.7 million of tax on the domain and samsung. Setting that aside, and so that was commitment that the court made and so the way the law reads, you have to set that aside from revenue. And so we're not treating that as an expenditure but we're dropping the m&o revenue for that because that has to be refunded so these are some intricacies, I assure you, we're spending a lot of time analyzing it and trying to see exactly where it is going to come this year and next year but it is not an exact science. Any of you that have other questions, please do feel free to call me if you want me to meet with you or meet with your staff, or if you want me to, I mean, we'll have better data as we go along but we think we're on exactly the same assumption level that the chief appraisal office is.
>> I will be calling you later.
>> feel free to do that.
>> I will definitely do that.
>> when do we get a third revenue projection.
>> July 21.
>> unless they turn it, release it early.
>> and this is, what, the 25th 25th. The 25th of July is the certified role. We're in communication with them.
>> it should be very close.
>> susan, you mentioned the protesting the tax valuation for commercial properties, knowing there has been instances in the past where commercial properties protested their value, took it to court, one, got money refunded and sold the property for significantly more than the tax appraised value that they were protesting. Where are we on pursuing sale price disclosure.
>> I went to the legislature had two hearing, the senate and the house on appraisals, and I didn't testify in them but I did sit there to find out what they're talking about and there is certainly still discussion on sales price disclosure. To me, it seems like a given, if you want the appraisal district to do an accurate job, you night to give them the tools -- you need to give them the tools they need and one is sales price disclosure. They can get some of it, but not enough. I think it is the board of realtors that really oppose that so there were groups that do not want that kind of disclosure, but they're talking about that, they're talking about one of the things that happens, and this is very important to us and as people start talking to you, you know, when the school finance bill came in they required the districts to appraise high enough because what they didn't want is them to under appraise and some school districts and others give them money when in fact, they're under appraise so the controllers office does a quasi audit of that. But the essence of it, as I heard that testimony is they're on the high side because appraisers are afraid to get too slow our system really push it is high because of that and I sense both the house and the senate were very carefully considering that what impact that had. The other thing that will make a tremendous difference, and it is key to understand is, that the school tax rate does not have and effective tax rate in it, and that is so important because when you have these inflated values, like you know with our tax rate, the effective tax rate calculation pull it is out, pulls the inflation out for the role as a whole, not each property but the role as a whole. That is why with debt services you see the rate going down. But if do you not have that and they didn't adopt that with the school, if properties were going up 13% here and that tax rate for schools is not coming down like our, is to compensate for that and people are paying on place inflation, they are, and we're going to see that and in communities that have a growth in value, there is going to be, I think, a significant hit, especially since the school tax is by far the largest one on the bill that goes out. So we, I've been talking to tack about that, it is my intention to meet with the legislators on that. I don't know if that was kind of an unintended consequence or when t was deliberately designed that way but this is a very serious thing for taxpayers in this community, that change.
>> okay.
>> anybody else here on this item? Thank you very much.
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Last Modified:
Tuesday, July 1, 2008 1:51 PM