Houston mulls mill hike

HOUSTON — Houston homeowners may want to attend Thursday night’s work session of the Houston City Council when the possibility of a mill rate increase will be batted around.

Deputy Mayor Jim Johansen is urging council members to consider asking for a voter referendum to raise property taxes by up to 2 mills to help finance the Houston Police Department.

For a home assessed at $150,000, that would mean an increase of $300 a year in property taxes, or a total bill of $2,244. For a home assessed at $275,000, it would be an increase of $550 per year, and for a $400,000 home, those mills would mean $800 more per year.

“There’s a perpetual problem with financing the police department,” Johansen, who currently rents a home, said Monday. “We just balanced the budget, but we did it with so many cuts and tightening measures, it’s just not enough to keep everything operating sufficiently. So we’re going to have to ask citizens if they want a police department and if they do, they’re going to have to help pay for it.”

The city’s current mill rate is 3. Most of it — 2.5 mill — goes toward funding roads. The other .5 goes to the fire department. So there isn’t yet a mill dedicated for the police department, which was created about five years ago and was almost disbanded in 2009 because of a lack of funds.

Council recently balanced the city’s $1.1 million budget for fiscal year 2011 by cutting a full-time police support position to part-time, trimming the fire department’s and city administration’s training budget, and cutting the amount of newsletters going out to voters. About $13,000 was saved through those cuts.

But council members Lance Wilson and Ruth Blanchard are adamantly opposed to a property tax increase.

“No more taxes!” Wilson said Monday. “With national, Alaskan, local and household economies in such a fragile state, now is not the time to even consider raising taxes. Houston doesn’t need to raise property taxes to provide the same level of services we have now. We need to live within our means.”

Wilson said the mill rate was set and capped by referendum in December 2000 not to exceed 3 mills.

“The city has assessed property owners to the maximum rate allowed since then,” Wilson said. “Increased local economic development will expand the tax base by raising property values and bringing in more sales tax revenue without new taxes on homeowners and existing businesses.”

Blanchard said she doubts residents would ever vote for an increase in the mill rate.

“The police are doing their job just fine,” Blanchard said. “City hall administration needs to watch their spending more. They just need to be wiser about it.”

Wilson and Blanchard said they think the city’s grant writer, Christian Hartley, should be working to bring in more grant funds for the city.

“He’s supposed to be a helluva grant writer,” Blanchard said of Hartley. “I also think we should be getting reimbursed from the borough and other cities for providing fire and rescue assistance outside our jurisdiction.”

Councilwoman Natasha Schachle said she hasn’t formulated an opinion about whether the mill rate should be increased. She’d just like to let residents decide.

“It’s the voters that are going to make a decision on that,” Schachle said Monday. “I don’t think it’s up to the council to decide. But it’s only in the discussion phase at this point.”

Houston Treasurer Carolyn Grabowski said she agrees with Johansen on the need for such an increase. There aren’t enough large businesses in Houston — such as the big box stores in Wasilla — to generate enough revenue through sales tax.

“At this time, the city does not have a consistent revenue stream, other than property taxes, to cover the expenses for another department,” Grabowski said. “If the residents truly want a police department, the only option appears to be to increase the mill rate. That increase should be designated to cover a larger portion of our Public Safety departments. Very bluntly, it’s really a matter of residents putting their money where their mouth is. I would love to know if there are any other suggestions.”

Thursday’s work session begins at 6:30 p.m. at Houston City Hall at Mile 57 of the Parks Highway, on the hill next to the fire station.

Contact K.T. McKee at kate.mckee@frontiersman.com or 352-2252.