San Benito holds second public hearing on proposed tax rate and gives first reading of 2025–26 budget

The San Benito City Commission held a second public hearing Aug. 19 on the city's proposed tax rate and gave first readings on the tax-rate and annual budget ordinances, city officials said. No final vote to adopt a tax rate or the budget occurred; staff presented figures and commissioners asked questions before a later decision.

Finance Director Stephanie (identified in the hearing as "Stephanie") opened the presentation and responded to commissioner questions about the city's interest-and-sinking (I&S) rate and projected property-tax revenue. During the hearing Stephanie said the current I&S rate this year is "0.039202" (as stated at the hearing) and that the city had reduced a prior I&S component that had been around "6'cent" to about "3'cent" (comments during public discussion). Stephanie also told the commission, "So the total property taxes budgeted for last year was 7.5, and this year it's 8.6," and staff described that difference as "an extra 1.1" (figures presented at the hearing; units not specified in the hearing record).

Why it matters: The tax-rate ordinance and budget set how the city will balance services, staffing and capital needs during a period the city described repeatedly as a growth phase. Commissioners and members of the public focused on whether recent reductions in certain debt components should lead to a tax cut or be retained for equipment, employee pay and water/drainage needs.

Discussion and public comment

Several residents spoke during the public-comment portion and the tax hearing. Eddie Loa criticized perceived broken promises on street repairs and urged the commission to improve employee pay to reduce vacancies. Mike Travis and other residents urged fiscal caution but said they favored lower taxes if doing so would not undercut public safety or operations. Commissioners pressed staff for clarity on what the I&S and sinking-fund numbers represent and how new housing will affect revenue.

Commissioner Galvan (identified in the hearing as "Commissioner Galvan") said he favored a 1- to 2-cent reduction in the tax rate but acknowledged that growth and pending capital needs could argue for retaining revenue. Mayor Paul Taylor Goodman and other commissioners emphasized the city's growth, noting recent and planned subdivisions and the need to fund infrastructure, fire and police services and water projects. One commissioner told colleagues that the city is "in a growth period" and that "you can't have growth without taxation."

Staff clarifications and next steps

Staff told the commission that new houses in recent and planned subdivisions will contribute property-tax revenue only after they are on the rolls (staff said it would take about a year for lots that are currently being developed to show up as tax collections). Staff also said the budget as published uses a conservative collection rate (96.70% in one calculation cited at the hearing) to reflect growth-related uncertainty.

City staff described use of unassigned fund balance (referred to in the budget book as "additional financing sources") to balance the budget this year; the hearing record shows staff said the budget would draw on roughly 1.8 million from reserves to balance the general fund (as presented in the budget documents; staff termed that source "unassigned funds"). Commissioners requested clearer labeling of that line in the budget document (some asked for it to be labeled "Unassigned Funds / Balance" to avoid confusion with recurring revenue).

Action taken

The commission held the required public hearing and completed first readings of the tax-rate and budget ordinances. No final vote to adopt a tax rate or the budget occurred at the Aug. 19 meeting; staff said the ordinances would return for the second reading and formal adoption at a later meeting after any additional workshop and revisions.

Ending

Commissioners scheduled additional opportunities to review the numbers, including a budget workshop scheduled shortly after this meeting. Staff said the city must complete the second reading and adoption in accordance with state deadlines. The commission closed the hearing at about 6:07 p.m.