- Real Estate
- Paris Flash
Paris residents have received more than $20 million in property tax relief in the 20 years since local voters approved a one-fourth cent increase in the sales tax, city Finance Director Gene Anderson said.
By a margin of more than two-to-one (1,702-807), city voters on May 1, 1993, decided on “the adoption of an additional Sales and Use Tax within the City of Paris, Texas, at the rate of one-fourth of one percent to be used to reduce the property tax rate.”
In the fiscal year that began Oct. 1, 1993, Anderson was able to immediately cut the city’s property tax rate by 7.212 cents, slashing the rate by 13.3 percent from 54.105 cents per $100 assessed valuation to 46.893 cents.
In the 20 years since then, the state comptroller’s office has sent the city 237 monthly sales tax checks ranging from $43,959.84 in March 1994 to $153,829.72 in February 2009.
Since 1993, that one-fourth of 1 percent has generated for the General Fund a total of $20,459,779 – an average of $86,328 a month, $1,035,938 a year.
Paris merchants typically send about $2.8 million per month to the state from the 8.25 percent sales tax. The state then rebates to the city its 1/33rd share earmarked for property tax relief.
“The property owners’ gain from that is that people who don’t live here pay sales tax. They’re from the county, outside the city, or from Oklahoma or somebody passing through from Colorado or wherever. They’re people who don’t live here and don’t use our services,” Anderson said.
“Or, they are people who live in Paris but don’t own property and therefore don’t pay property tax. Property owners aren’t bearing the entire burden,” he said.
Anderson has estimated that the city’s quarter-cent of the sales tax for property tax relief will add $1,225,000 to the General Fund in the fiscal year that begins Oct. 1.
More than $1 million in sales tax money continues to flow into the General Fund each year for property tax relief, Anderson said.
In the same election that approved property tax relief via a one-fourth cent increase in the sales tax, Paris voters also OK’d by a vote of 1,757 to 763 raising the sales tax by one-fourth cent to create the Paris Economic Development Corporation “to carry out economic development programs consistent with the purpose and duties set out in the Development Corporation Act of 1979.”
Thus, the PEDC is also funded not by property taxes, but by sales taxes.
At the time of the 1979 election, the sales tax was 6.25 percent, which goes to the state, with the county allowed a half-cent and each city a full cent.
In addition, cities were given the right to let voters authorize an additional one-quarter cent to fund economic development corporations and an additional one-quarter cent for property tax relief.
The proposed 2013-14 budget for the City of Paris includes an anticipated $4.9 million into the General Fund from its one-cent of the sales tax and $1,225,000 into the General Fund from the one-quarter cent of the sales tax earmarked for property tax relief.
All $6,125,000 goes into the same pot, Anderson said – all of it from sales taxes rather than property taxes.
In the two most recent Paris City Council meetings, there were complaints that the City of Paris used the sales tax receipts to cut taxes the first year, but not since.
The 7.212-cent cut off the rate in 1993 “was basically a one-time deduction” in which he replaced property tax revenue with sales tax revenue, he said.
The tax bill that the Lamar County Appraisal District sends out each fall “actually shows the additional property taxes that a person would have paid if we hadn’t done that quarter-cent tax,” Anderson said.
On a typical tax bill sent out last fall for an $83,590 residence in the Paris city limits and the North Lamar school district, the tax bill was $1,358.75:
– North Lamar ISD: $58,590 taxable value; tax rate $1.12150 per $100; tax due = $590.86
– Paris Junior College: $75,590 taxable value; tax rate 18.7 cents per $100; tax due = $137.61
– Lamar County: $69,500 taxable value; tax rate 43.87 cents per $100; tax due = $305.29; “County taxes reduced $63.74 (9.15396 cents per $100) by sales tax.”
– City of Paris: $63,590 taxable value; tax rate 51.107 cents per $100; tax due = $324.99; “City taxes reduced $55.48 (8.72464 cents per $100) by sales tax.”
By Charles Richards, eParisExtra
Following is a chart of the sales tax checks the state comptroller’s office has sent the City of Paris each month for property tax relief since the May 1, 1993 city election to adopt a one-fourth cent increase in the sales tax “to reduce the property tax rate.” (Click on chart to enlarge)