County judge says new law, COVID-19 impacting budget

Posted 7/8/20

Over the next several months, Wood County commissioners, the county judge, the county auditor, elected officials and department heads will be meeting to discuss the county’s next budget for fiscal year 2020-21, the 2021 budget.

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County judge says new law, COVID-19 impacting budget

Posted

Over the next several months, Wood County commissioners, the county judge, the county auditor, elected officials and department heads will be meeting to discuss the county’s next budget for fiscal year 2020-21, the 2021 budget.

This year’s budget process comes on the heels of Senate Bill 2 (SB 2) which Gov. Abbott signed into law in 2019.

SB 2 is an expansive reform bill meant to slow the growth of Texans’ property tax bills.

SB 2 makes a number of changes in the law, including requiring cities, counties and other taxing units to hold an election if they wish to raise 3.5% more property tax revenue than the previous year. 

The growth rate excludes some areas of spending, including taxes levied on new construction, and can be averaged over three years, allowing taxing units to exceed the 3.5% threshold in some of them. Other adjusted items which are excluded from the 3.5% cap are increased state inmate costs, indigent health care costs, county hospital costs (8% maximum), indigent defense costs (5% maximum) and unused increment rate (after 2020).

Municipal and local government associations note that while homeowners may see a nominal savings due to SB 2, it will hurt local governments (budgets and services offered) substantially.

“After the bill’s passage last year, the ramifications of Senate Bill 2 were overwhelming for those of us in county government,” notes County Judge Lucy Hebron. “The changes in the law have meant seminars, briefings and learning the new laws, terms, forms and other information necessary for all of us who are involved in the budget process, from our tax-assessor/collector, our auditor, our commissioners and the chief appraiser at the Wood County Appraisal District. Senate Bill 2 was a challenge to us then but even more so after COVID-19 and its economic repercussions.”

In light of the massive economic fallout from the corona virus, state and local government budgets will be impacted even more with projected revenue shortfalls.

In anticipation of shortfalls, Abbott has instructed state agencies to trim their budgets by 5%.

Hebron, notes, “During this year’s budget season, many county judges are advising their elected officials and department heads to be cognizant of the potential for shortfalls and suggest cutting 10% from their budgets. These government efforts are in line with the private sector efforts which have implemented layoffs, salary cuts, hiring and salary freezes and other draconian measures to cut budgets. What this means for Wood County and all others is that counties must maximize all revenue sources. Since property taxes are the primary source of revenue for counties, counties must now examine all sources of revenue, including fines/fee collections; optional fees which may be available, but not assessed; payments in lieu of taxes in prospective tax abatement agreements; full prosecution of bond forfeitures; and full implementation of the optional motor vehicle registration fee.”

She adds, “In light of the current economic climate and the potential shortfalls in all of our personal budgets and our county budget, I requested that all Wood County officials and department heads keep the impacts of our economy in mind when submitting their budget requests this year and to be cognizant of what others are having to do during this challenging time. Any requested increases should by substantiated with documentation and justification for such increases and departments are asked to re-estimate line item needs for the upcoming year, instead of relying on current budget amounts.  All of us will have to face shortfalls, adjust our expectations and our budgets. County government is no exception.”