Image: When Montgomery County Judge Mark Keough (center) leaned over to whisper to Precinct 3 Montgomery County Commissioner James Noack (at Keough’s left), the budget expert on the Montgomery County Commissioners Court, taxpayers received a wonderful message overheard through the County videotape system on Wednesday, July 29, 2020.
The Golden Hammer Staff Reports
Conroe, July 30 – It was an historic whisper and delivered a wonderful message to Montgomery County taxpayers, if only the prognostication holds true. Although none of the members of the Montgomery County Commissioners Court wanted to commit to a tax rate during the County Budget Workshop, which began on Tuesday, July 28, 2020, and will continue through Friday, July 31, a whisper overheard on the County videotape system between Montgomery County Judge Mark Keough who looked to Precinct 3 County Commissioner James Noack for leadership delivered a message to taxpayers which will hopefully be cause for jubilation.
During a brief break, Keough leaned over to Noack to ask for the direction Noack, who is the Commissioners Court’s budget and finance expert, intends to go with the County Budget for Fiscal Year 2020. Keough whispered, ““James, you’re still working off of the effective tax rate, right?”
Noack, wearing a face mask nodded his head and whispered back, “That’s right.”
With that quiet message, taxpayers may not face a tax increase from the Fiscal Year 2021 Budget, which the Commissioners Court will approve preliminarily on Friday. The “effective tax rate” is the level of County government spending and taxation, which will not result in a tax increase for beleaguered Montgomery County property taxpayers. Passage of such a Budget at the “effective tax rate” or the “No New Revenue Rate,” as the phrase now exists under Texas law after the passage of Senate Bill 2 during the 86th Texas Legislature last year, would make for the second year in a row that County taxpayers will not suffer a tax increase despite ever-climbing property tax appraisal increases from the aggressive tax-hungry Montgomery Central Appraisal District.
Last year, on August 1, 2019, the Commissioners Court voted unanimously to adopt a 44.75 cents per $100 valuation tax rate and set the spending budget for Fiscal Year 2020 at $336,506,358. The Budget and tax rate were the first time in recent history that the County Commissioners Court set the tax rate at the “effective tax rate,” the lowered tax rate, which, due to property tax appraisals, will not result an a tax increase for Montgomery County property taxpayers. Please see “With Noack’s, Keough’s Strong Leadership, Montgomery County Commissioners Court Adopts Budget At “Effective Rate” (Same Taxes As Last Year!) For First Time In Recent History!” The Golden Hammer, August 2, 2019.
At the Commissioners Court meeting yesterday County Tax Assessor-Collector Tammy McRae announced that the “No New Revenue Rate” for Fiscal Year 2021’s Budget would be 43.19 cents per $100 valuation. McRae noted that, for the first time in history, the Appraisal District was unable to certify property values “we think because of COVID.” Instead, the Appraisal District only provided an estimated value for the tax rate calculations.
Montgomery County Budget Director Amanda Carter made a comprehensive economic and budget presentation to the Commissioners Court after McRae spoke. Carter explained that her Budget Office preliminary budget for FY 2021 is $348,610,803, which is a 3.57% increase in County spending over Fiscal Year 2020.
During the discussions later in the day during the Budget Workshop, the Commissioners Court reached a general consensus to spend approximately $400,000 more than Carter’s original proposal. Most of those funds will go to extra expenses from the courts in the Montgomery County Courthouse.
Carter noted that the rate of inflation during the past year, measured in the Consumer Price Index, has only been 0.6% annually. The County’s population is 590,925. The County’s unemployment rate of 12.5% is higher than the national average rate of 11.1% primarily due to COVID-19 layoffs and challenges in the petrochemical industry.
Noack suggested increasing expenditures on County debt service in order to maintain a strong debt service fund balance of 25% of the $44 million per year the County government will pay in debt service during FY 2021. “That will help us to maintain our AAA bond rating in order to save us a lot on interest payments,” Noack explained during the meeting.
The increase in expenditures for debt service would not impact the ability of the Commissioners Court to adopt a budget which does not raise taxes on local taxpayers, as the whispering between Noack and Keough indicated.