Raising Ellis County property taxes for 2021 is on the table for discussion, as the county sees its future income from oil valuation take a steep drop.
The Ellis County Commissioners on Monday at their regular meeting said they will talk about boosting property taxes by as much as 1.8% for the coming budget year.
That’s in addition to the half-cent in countywide sales taxes Ellis County voters recently approved through April’s special mail-in ballot election. Enforced for 10 years on all purchases in the county, the two quarter-cent sales taxes will generate a total of $2.2 million annually for the county.
“If we did not raise property taxes at all for the next 10 years, and we just used the sales tax to offset that, not even half way through those 10 years we’re right back in the same place we are now,” said Darin Myers, interim county administrator, describing budget projections during the meeting in the Ellis County Administrative Center, 718 Main.
The county commissioners have made steep cuts of more than $2 million the past two years from the county’s budget to get expenses more in line with deeply inadequate revenue.
But with oil a staple of the local budget, Ellis County now will lose about 50% of its oil valuation from the ongoing drop in world oil prices and the COVID-19 economic downturn, according to County Appraiser Lisa Ree.
The county had about $32 million assessed valuation in 2019 for the 2020 budget. Ree’s preliminary estimate is $13 million or $14 million in 2020 for the 2021 budget.
As a result, the county’s 2021 budget will probably lose about $500,000 in revenue, Ree has said.
At the same time, the county can only raise property taxes by so much.
“We could increase it by 1.8 percent, that’s the max allowable by the state,” Myers said.
“I’d like to see us look at that 1.8 percent,” said Commission Chairman Butch Schlyer. “We’re going to lose a lot of oil money next year … we’ll never make it up. Oil will come back in the future, but once we don’t get it, we don’t get it.”
Commissioner Dustin Roths indicated an increase is possible, but shied from committing to a number. He cited the more than 2,000 voters who cast votes against the quarter-cent general sales tax and the quarter-cent sales tax for health services.
“I imagine that we will have to be somewhere in the 1.5%, 1.8% range,” Roths said. “I will say that it is a point of pride for me that we are the 105th out of 105 counties in property tax valuation payout.”
Monday’s property tax hike was the start of talks over the next few months to sort out the 2021 budget, which will include deciding big-ticket items like the county contribution to employee insurance benefits.
Despite so many ifs in the budget for next year, Roths said, “I’d like to be able to consider getting rid of some of that property tax.”
Schlyer warned that the state-mandated tax lid on raising property taxes could change.
“We don’t know what the Legislature might do with that tax lid,” he said. “But it sounds like they want to squeeze it down even harder.”
Commissioner Dean Haselhorst said the tax lid leaves counties with no flexibility.
“It incentivizes us to go to the cap every single year, and it doesn’t allow us to be good managers with flexibility in our budget,” Roths said, adding it’s a discussion county officials should have with state Legislators and remind them county officials answer to voters on spending and taxing.
“Sometimes that’s their little cookie to the voter. ‘I might have raised your taxes on income, but I stuck it to the counties so they can’t do it,’” Roths said of Legislators. “Well maybe all those voters think the counties spend their money a little better than the state does.”
Haselhorst indicated the subject isn’t closed.
“I’d like to have that discussion down the road a bit,” he said.