The Orange City Council Monday was faced with a deadline and voted 6 to 1 for a tax increase. The tax rate will be 80.5 cents per $100 valuation.
City Attorney Guy Goodson told the council the city charter requires a tax rate be approved on two separate readings before Thursday. The new budget year starts on October 1. The second reading will be today during a regular scheduled council meeting.
The vote needed to have at least five of the seven members in favor of the tax rate. Last week the council voted 3-3 on a tax rate. Goodson said if five did not approve the new rate on Tuesday, the rate would revert to the current rate.
The current rate of 71.7 cents per $100 valuation would have left the budget in a major deficit because of property values lost after Harvey. The rate needed to raise the same amount of revenue this year is 76.9 cents, known as the effective rate.
District 2 Councilor Brad Childs wanted to go with effective rate. He said the city had enough money in reserves to cover the deficit in income and expenses and still have 31 percent of operating revenue in reserves.
However, other council members were concerned about an upcoming sale of $4 million in bonds. The reduction of savings could lead to the city paying more in interest on the bonds.
At-Large Councilor Paul Burch questioned why the council has met and discussed the budget and tax rate for two months with no concensus.
In the end, Childs voted for the higher rate. District 4 Councilor Annette Pernell was the only member opposed to the rate. Mayor Larry Spears Jr. said no one wants to raise taxes, but the increase is needed.
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