San Benito ‘happy’ as leaders cut property tax rate

SAN BENITO — Residents here can’t remember when — or if — the city cut its tax rate.

This week is therefore going down in the history books.

On Tuesday, city commissioners unanimously passed a 2-cent tax cut, reducing the property tax rate from 72 cents to 70 cents per $100 of assessment.

“I’m glad we’re giving savings back to taxpayers,” said Commissioner Pete Galvan, who proposed a tax cut last month, on Wednesday. “I think it’s sustainable. I think with the growth we’ve had, we’ll get some revenue back.

At a meeting Tuesday, City Manager Manuel De La Rosa proposed the tax cut.

For every penny, the tax rate generates about $80,000, Elisa Rosas, the city’s chief financial officer, told the commissioners.

“I believe with inflation going on, with COVID, with the increase in food, in gasoline, we can sustain…the 2-cent cut,” De La Rosa said.

Draw from an unrestricted fund account

As part of his plan, De La Rosa is pulling $500,000 from an unrestricted fund account of $11 million to help fund a $1.5 million street project – larger than the paving program current $1 million.

Under a proposed overall budget of $15.8 million, it is hiring a procurement officer while planning to hire a police officer and firefighter starting around February 1.

“I think it’s manageable,” Galvan told the commissioners, referring to the tax cut. “Most departments have to do what they are tasked to do: manage their departments, balance their budgets and be a little more efficient. It’s taxpayers’ money. We are trying to save citizens money and you have succeeded in that and you have balanced the budget.

Meanwhile Commissioner Rene Garcia voted for the tax cut after warning last month that finances could be too tight.

“We do not want to affect our public services in any way. We don’t want to paralyze the departments, especially public works and street repairs. We have a lot of work to do,’ he told commissioners, adding, ‘whatever we can do for our residents to help them in these times. Who knows, next year we can do better.

Utility system bailout

As commissioners plan to raise corporate water rates, officials plan to dip into the city’s big stimulus check to help bail out the utility system.

After months of debate, in June commissioners set commercial water rates to rise 8.3% to 9.8% each year over five years, based on water use , starting next month.

Now commissioners plan to withdraw more than $3 million from the city’s $9 million share of the American Rescue Plan Act to help bail out the utility system, which ran a 2.8 deficit. million dollars last year.

For years, previous city governments delayed rate increases, pushing the utility system’s annual deficits to $2.8 million.

To make up for annual deficits, officials had dipped into the city’s general fund budget.

Despite rising water rate revenue, officials plan to withdraw $1.5 million from the U.S. bailout account to help cover the water utility shortfall while dipping into the big check from federal stimulus of $643,000 to help bail out the sewer service, Galvan said in an earlier interview.

Meanwhile, households are getting a two-year break before their rates begin to climb 10% over a five-year period from October 2024.

Background

In 2012, a previous commission passed a 4-cent tax increase, raising the property tax rate to 72 cents per $100 of assessment.

In 2003, the city increased its tax rate from 67 to 68 cents.

Penny D. Jackson