Fair Oaks Ranch officials are continuing the process to implement a new tax exemption for disabled and senior residents in the city – an ordinance that hasn’t been addressed since the 1980s – and opinions among council and resident remain split.
After much discussion and input from citizens, what could have been a second and final hearing altering property tax exemptions in the city reverted back to a first reading after the exemption was amended during a recent council meeting. Although there was some pushback on the city “shifting the tax burden” to younger residents, the majority of council members remained in support of the measure.
“Are there challenges out there, yes there are,” FOR Mayor Greg Maxton said, noting the increases in market and appraised property values and inflation and the impact it has on older residents with fixed incomes. “If we as a city can provide some relief to some of our residents, I would say that’s part of our responsibility. If we can help them, can we do that? So the first thing I looked at was, does it put our city in jeopardy? Are we at risk because of this action?
“As I look at the numbers, I’ve heard mentioned that we’ll have to decrease services. I don’t see that. I believe services would remain the same. This council has done an excellent job the last year of serving our community and really determining the actions that we need as a council and doing the right things for our city. And I believe that even with this exemption in place, we would continue to do that.”
The original ordinance approved on a first reading by the council last month would have introduced a property tax exemption of greater than 10 percent or $50,000 for disabled residents and residents over 65 years of age. However, after some pushback from residents and fellow councilmembers, Place 1 Councilmember Emily Stroup amended the ordinance to remove the 10 percent measure for older residents while maintaining the percentage for disabled residents.
“It’s not trying to shift burden,” Stroup said of the tax exemption for older residents, noting her intention in the amended ordinance was to take the existing property tax exemptions and convert it to today’s dollars. “It’s not trying to give people the ability to necessarily stay in their home or whatever. But it’s just to keep things consistent with today’s dollars is how I interpreted that. …
“My intention in asking that original question was just to make sure that we’re staying consistent because obviously it’s not 1980 anymore.”
The council previously had considered a 5 percent tax exemption for the older resident of FOR who currently benefit from a $20,000 property value exemption that was put in place in 1988 when the city was founded. However, Place 6 Councilmember Chesley Muenchow noted early on during the council’s discussions that the same 1980s exemption in today’s dollars would equate to just under $50,000.
Muenchow’s desire to see the translation of the 1988 exemption to 2022 dollars, to respect the city’s “founding fathers’” wishes, led to the discussion of the 10 percent taxable value exemption.
Before council members began their discussion on the two pending tax exemptions, a few residents took the lectern to voice their opposition, including former FOR Mayor Garry Manitzas and former candidate for the Place 5 council seat, J.C. Taylor.
Taylor questioned why such exemptions were being considered during a time of mass inflation and considering the next year’s budget for the city had yet to be established. Changes to local tax ordinances are required to be done before the budget cycle as property tax revenues are a key driver for the city’s budget, which Assistant City Manager Scott Huizenga explained later in the meeting as he had during previous meetings.
“Fundamentally, I strongly disagree with any type of entitlement, subsidy or Ponzi government structure,” Taylor said. “I do not believe the council is mandated to make sure all residents and/ or future residents can afford to live here in FOR. Philanthropy should be left to private organizations, charities, sects and the free market in general.”
Taylor urged the council to table the discussion until the budget is completed, asking members to reduce taxes for all residents if there would be a revenue surplus in the city.
Manitzas spoke out against the ordinance change for older residents as well, saying he reviewed the video of the city council’s previous meeting which he left “feeling council had chased a solution for a housing affordability problem that simply does not exist.”
“What worries me is the precedent set by decision making primarily driven by emotion with little meaningful data analysis,” he said, noting the exemption change is unlikely to significantly crater anyone’s finances.
“We made great progress over the past several years to move to fact-based decision making with input from qualified professionals. I don’t want the council moving back to the seat-of-the-pants methodology that was used by some earlier decision makers that generated so many of the legal and financial issues we have dealt with in the past several years.”
In the end, Stroup’s amened motion to allow up to a $50,000 property value exemption for residents 65 years old and older and the greater exemption of 10 percent or $50,000 of a property value for disabled citizens was approved on first reading. The ordinance change will come back before the council at its June 16 meeting for a second reading. If approved, the ordinance will go into effect.
Maxton said the decision was not political, but he saw it was an opportunity to help citizens. He said some citizens have approached him about the exemption, noting he didn’t dive into their financial situations because it wasn’t his business. He said he takes residents at their word.
While Maxton acknowledged the future finances of the city can’t be predicted based on property values or inflation, as evidenced by the COVID-19 pandemic’s impact on local revenues, he said the council can always reconsider the ordinance in future meetings should finances change.
Comment
Comments