Midland’s Growing, Taxes Might Too

Midland city councilmembers kicked off the 2019 budget season Monday morning with a planning workshop, where city staff proposed larger budget allocations and a new tax rate that is likely to raise Midlanders’ property tax bills.

The presentation began with a discussion about Midland’s recent population and economic boom, indicated by an uptick in oil and gas permits, property valuations, and new construction permits. The city predicts over 4,000 new residents will call the Tall City home this year, increasing the total population to over 142,000 by the end of the year.

With the surge in population, staff recommended a $16 million budget increase that spread across five major areas:

  • $10 million for street improvements
  • $700,000 for traffic projects
  • $74 million for pay increases and 22 new personnel
  • $8.4 million for new equipment and vehicles
  • $960,150 in facilities capital projects, $1.05 million for city hall HVAC improvements and repairs, and $190,000 for new fire station security access

According to Midland City Manager Courtney Sharp, the city is “biting off a big chunk with 22 new employees … but this is to address the growth that we’re seeing.”

The presentation also included data on the city’s property tax valuations, which are predicted to increase by $751 million over the next year. The major growth is seen in residential and commercial properties, where the average Midland home value and business property value are estimated to increase by 12 and 15 percent, respectively.

Higher property values often mean paying a higher tax bill to the city, unless they lower their tax rate enough to prevent an overall tax increase. This “revenue neutral” rate is called the effective rate, which simply generates the same amount of money for the city as last year, excluding new properties.

In Midland’s case, they aren’t lowering their rate enough to prevent a net increase on most homeowners’ tax bills. The city proposed a new property tax rate equivalent to the effective rate plus three percent, or .41 per $100 valuation. If the rate is approved, the city would generate $2.68 million more revenue from the same properties it taxed last year, plus additional money from new construction. For the average Midland homeowner, this translates to an approximate $100 increase on their annual tax bill. Councilmember J. Ross Lacy, however, defends the proposal by noting that inflation plus Midland’s population growth has grown by much more than three percent.

Midland city council is scheduled to establish the proposed tax rate on July 31 and hold public hearings in August. Council will vote on the final budget and tax rate September 11.

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Lauren Melear

Lauren Melear leads the West Texas Bureau for Empower Texans & Texas Scorecard. When not working, Lauren enjoys spending time with her husband and their dog, as well as cooking, working out, traveling to the hill country, and cheering on the fightin' Texas Aggies.

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