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McLennan County lowers tax rate, tax burden

McLennan County lowers tax rate, tax burden


It is not often government delivers a tax break, but McLennan County commissioners pulled off that feat this week. They approved a tax rate of 42.5 cents per $100 valuation for the fiscal year beginning Oct. 1, meaning the owner of the average home in the county will save about $13.

The county is taking $15.9 million from its fund balance reserves, which some describe as a rainy day fund, to make the cut, McLennan County Auditor Frances Bartlett said. She said via email the county adopted a conservative budget, and using other revenue sources, including fines, fees and sales tax, was able to shrink the property tax rate while maintaining reserves at acceptable levels.

The goal, Bartlett said, is to maintain a reserve equal to 33% of the general fund budget, which stands at $134.9 for fiscal 2022.

“We held a hard line on spending last year and followed that up this year,” County Judge Scott Felton said.

He said he believes the county is on solid footing financially going forward, and he would not be surprised if upcoming business developments lead to 1,000 new jobs, not counting the Amazon fulfillment center under construction and likely to open before year’s end. These developments likewise would contribute to the total taxable value of property in the county.

“What we’ve done in recruiting companies … I think we’ll be in pretty good shape next year,” Felton said. “We not only have to predict where we want to be this year, but plan two or three moves ahead.”

The county will give employees a 3% cost-of-living raise.

“We really didn’t have salary adjustments, except for 11 people taking on more duties to accommodate the growth of the county,” Felton said.

Bartlett said the county’s annual contribution to the Texas County and District Retirement System is based on a rate that ensures adequate funding. That being said, the county contribution to the retirement fund will increase from 13.48% to 14.7% of total employee compensation. The county also increased the employee contribution maximum to 6% from 5%, meaning a higher percentage of their contribution qualifies for a county match.

Felton said the county wants retirees to live a lifestyle they are accustomed to.

On the economic development front, the county is taking nothing for granted. Commissioners agreed to raise by $500,000, to $3.25 million, the county’s annual allocation to the Waco-McLennan County Economic Development Corp. fund used to dangle incentives before industrial prospects.

The city of Waco will match that allocation, Felton said.

Countywide property appraisals show an average home in McLennan County increased in taxable value from $154,700 to $167,569 year-over-year. Commissioners’ tweaking of the tax rate means that despite the increased value, the owner of an average-value home will pay $725 in taxes versus $712.

“Unless a property’s taxable value increased more than 10%, that property owner should see a decrease in their tax due McLennan County,” Bartlett said.

Specifically, the tax rate commissioners approved for fiscal 2022 is 4.37 cents less per $100 valuation than the current tax rate and 1.28 cents less than the so-called “no-new-revenue” tax rate, formerly known as the “effective rate.”

The current rate is 46.87 cents per $100 valuation.

McLennan County has decreased the tax rate a total of 11.03 cents since the 2013 tax year, according to an explainer released by Bartlett.

“Although the tax rate decreased this year, the county was still able to shift more tax revenue into the Permanent Improvement Fund than in years past, $500,000 more than the prior year,” Bartlett said. The increase, she said, means the fund balance can be moved forward to pay for capital projects and can reduce the need to issue debt in the future.

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