Council passes FY2024 budget with revenue increase

San Marcos City Council voted on several hot-button financial items for the community on Tuesday, including passage of a budget and tax rate.

The discussions prior to each vote were lengthy and often appeared to pit city staff against city council during its regularly scheduled meeting.

But one of the most contentious conversations of the evening was focused on the proposed increase in the tax revenue for the FY 2024 Budget, a measure which was passed five to two, with San Marcos City Council Members Saul Gonzales and Alyssa Garza contributing dissenting votes.

Trying to bring clarity to the discussion based on information presented San Marcos Director of Finance Jon Locke said adoption of a budget that will require raising more property tax revenue than in the previous year requires a separate vote to ratify the property tax revenue increase–property tax revenue determines the majority of the budget.

The Fiscal Year 2024 Budget, in a separate vote, was also approved five to two, with the same council members voting against it.

Locke said the tax rate will stay the same for 2024. However, based on information discussed at the meeting, the tax revenue for the city will be increasing due to additional properties added to the payroll and an increase in appraisal values for already existing homes– the latter reason sparked a heated debate. Locke said the total tax revenue increase is $5,947,057, $2,756,989 of which is from new property and $3,190,068 of which will be procured from increases to property taxes for existing homes.

Gonzales said he’s received a large amount of complaints from community members related to the amount that their individual property taxes will go up.

“It’s really bothersome to me,” Gonzales said. “And many others.”

Locke said property owners have the right to protest their appraisal values, but that is done through the appraisal district, not the city.

San Marcos City Manager Stephanie Reyes noted that with a homestead exemption, property taxes could only increase 10% from the prior year.

Reyes said difficult decisions had to be made to incorporate direction from the council that was given throughout the budget process.

She added that it would be incredibly difficult to make changes to the budget in the “eleventh hour,” adding that she is the one responsible for giving a voice to city staff who cannot speak publicly at the meetings.

San Marcos City Council Member Jude Prather said that budgets should be passed seven to zero because they “have been working on it all year.” He added that, if they wanted a budget that would reduce taxes, that should have been suggested to staff earlier in the process.

Garza said she would “commit to making difficult decisions to balance the budget,” which would have to be done before the end of the month.

“I’m willing to use my vacation time, the little bit I have left, or take unpaid time-off … to make time for any special called meetings, ” Garza said. “I’m not saying any of this to make you all feel sorry for me. I signed up for this. I just want you to know that it will be extra work [and] emotional distress on me as well … I’m willing to put in the work for my neighbors.”

San Marcos City Council Member and Mayor Pro Tem Mark Gleason pointed out that a tax rate must be adopted by Sept. 30 or the no-new-revenue tax rate would be automatically applied, which would mean the city would not raise the additional $6 million in revenue.

'So, when we’re talking about having special meetings. We’re talking about staff would have to do this tomorrow,” Gleason said. “I think the time for this discussion would be last month, the month before [or] the month before that. To try to do this the last second, on a second reading, is not fair to staff. I don’t even know how we would get it accomplished.”

Garza said that the reason that she is trying to make last minute changes is because the public is just finding out what is going on.

“What I’m hearing is that everybody agrees that there has to be something that changes,” Garza said. “To get them [the public] the information earlier.”

Garza and Gonzales both voted no to the 2024 budget and the tax revenue increase in order to “make a statement.”

The council also heard a presentation and public comment on changes associated with the proposed VISION SMTX plan–there will be one more public hearing and two votes upcoming on this plan.