Galveston council deadlocks twice on proposed 0.4302 tax rate after hours of public comment

Mayor Craig Brown opened a public hearing Sept. 18 on a proposed tax rate the finance director said would be 0.4302 per $100 of taxable value for tax year 2025.

Sheila Ladonye, the citys finance director, told the council the rate under consideration supports the budget adopted Aug. 28 and is composed of a debt service rate of 0.039755 and a maintenance and operations rate of 0.390445. Because the rate exceeds the "no new revenue" rate, Ladonye reminded council the tax code requires a 60% vote (five of seven council members) to adopt it.

The council heard more than a dozen public commenters during the hearing. Becca Scoville, a San Jacinto neighborhood resident, urged the council to fund the budget to sustain city services: "Reliable city services are much more important to our everyday lives than lowering my property taxes," she said. Donna Deese, also a homeowner and renter, said the proposed increase represents only "pennies a day" for a typical homeowner and argued the additional revenue is needed to maintain emergency readiness after storms.

Council debate ran more than an hour. Supporters of the higher rate pointed to rising costs for public safety, health insurance and emergency services, and to maintaining the citys bond rating by preserving reserves. Opponents said the city holds substantial fund balances across various restricted and special funds and pressed for stronger policies on how those balances are used before raising the tax rate.

The council voted on a motion from Mayor Craig Brown "that the property tax rate be increased by the adoption of a tax rate of 0.4302," language the finance director said was required by statute. The motion received four votes in favor and three opposed and therefore failed. Later, Councilman Peretta moved to adopt the "no new revenue" tax rate; that motion received three votes in favor and four opposed and also failed.

The two failed votes left the council without an approved tax rate at the meetings close. City staff and the city secretary explained the next steps under state law: if the council does not adopt a tax rate within seven days of the public hearing, the tax rate will default on Sept. 30 to the lower of last years tax rate or the no-new-revenue rate, and the council must meet within five days after Sept. 30 to ratify the default rate.

Ladonye noted an inconsistency in how the percentage change in the tax rate was described during the meeting: at one point staff language said the proposed rate would be "effectively a 0.526% increase," while the motion read aloud later described it as "effectively a 5.26% increase." The transcript shows both phrasings were used; council members did not reconcile the differing percentage figures during the meeting.

With no final tax rate adopted, the council directed staff to post a follow-up meeting to consider the tax rate before the statutory deadlines. If council ultimately adopts a rate lower than the one the adopted budget assumed, staff said an amendment to the adopted budget will be required at a future meeting to align revenues and expenditures.

Votes and formal motions recorded in the meeting are summarized below.