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Posted on: September 9, 2022

City Council approves budget, significant tax rate reduction

The Galveston City Council on Thursday approved the FY 2023 budget (10/1/22-9/30/23) and set a tax rate of 44.45 cents per $100 valuation for Galveston property owners.

The adopted rate is a 5.4 cent reduction from last year’s rate of 49.85 cents per $100 valuation. An increase in the minimum homestead exemption amount from $5,000 to $60,000 also contributes to a property tax cut for 9,771 resident homeowners. When combined with the ten percent cap on annual homestead assessed value increases, we can safely say that no resident with a homestead exemption will be hit with a city tax increase for the 2022 tax year. 

The budget is $350 million, which includes maintenance and operating expenditures ($180.5 million), one-time appropriations ($0.5 million), and the capital budget ($168.8 million.) 

The FY 2023 budget puts a continued emphasis on streets, drainage, water, and sanitary sewer projects for the island. The budget also includes increases in pay for public safety (police and fire) and civilian employees, as the result of collective bargaining for public safety and a compensation rate study of market values for civilian employees.

The City is in the best financial shape financially than it has been in recent memory. This is due to strong management controls, sound financial planning, and strict adherence to a set of policies and principles that serves cities well.

Here are some highlights from this year’s budget:

  • The General Fund balance has increased from $16.88 million in 2015 to $24.7 million in FY 2023 despite a major legal settlement, COVID-19, and the resulting major downturn in worldwide economic conditions. Most of the balance increase can be attributed to the sales tax revenue increases. 
  • Police officers’ salaries and pensions have improved substantially. Since 2015, police salaries have increased 44.4 percent, from $8.28 million to $12.7 million collectively, and the pension has more than doubled. Since 2016, the number of classified police officers has increased from 146 to 168.
  • Since 2015, firefighter pay has increased 30.5 percent from $6.54 million to $8.53 million, and the contributions to the firefighters’ pension has more than doubled.
  • The administrative overhead rate is 1.88 percent of total operating and capital budgets. 
  • The City has increased mandatory funding for two critical elements of our budget. The General Fund transfer to the Infrastructure and Debt Service Fund has gone from $1.38 million in FY 2015 to $5.7 million in FY 2023.

To review the FY 23 budget, please visit galvestontx.gov/financialtransparency. 

 

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