City of La Porte Annual Budget 1994-1995

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1 1 1 I I, I I I I I I I I I I I I I 1 INTRODUCTION What is a Budget? A budget Is a document that sets forth the financial plan the City will follow In providing services to Its citizens. It contains guidelines for normal operations as well as capital improvements to benefit the future. It is also an instrument whereby basic policies of the City can be presented along with their Impact on services and operations. The budget is used by City Administration to monitor Its operations and to assist Its mid managers In performing their directives. Finally, the budget Is the device that communicates to its readers the direction the City will follow in the future. Further information on the Budget Plan and Process can be found on page 1-18. SUMMARY OF RESOURCES The primary resources for the City of La Porte are taxation and charges for services. The underlying base for estimation of resource collection Is historical trend analys,ls combined with a conservative attitude. REVENUE SOURCES FOR FISCAL YEAR 1994-95 The graph at the right shows the revenue sources of the City of La Porte. The Taxes category Is comprised of ad valorem taxes, sales taxes, In lieu of tax payments and franchise fees. The Other category Includes Items such as licenses and permits and fines and forfeitures. A1llntergovemmental revenues have been removed. OTHER 3S CHARGES FOR SERVICES 33S Resources Derived Throuah Taxation The resources derived from the taxation of property located In the City Is by far the largest resource of the City. The process the City uses Is known as Ad Valorem Taxatlon"whlch means according to value. Fiscal year 1994-95 will mark the fifth year that the City has maintained its tax rate at 71 cents per $100 taxable valuation. The appraisal of property within the City Is the responsibility of the Harris County Appraisal District (Appraisal District). The Appraisal District Is required under the Property Tax Code to appraise all property within the county on the basis of 100% of Its market value. The value of real property within the Appraisal District must be reviewed every fIVe years; however, the City may, at Its own expense, require annual reviews of appraised values. Under this legislation, the City continues to set tax rates on City property. However, if the effective tax rate, excluding tax rates for repayment of general obligation bonds and other contractual obligations and adjusted for new improvements, exceeds the rate for the previous year by more than 8%, qualified voters of the City may petition for an election to determine whether to limit the tax rate to no more than 8% above the effective tax rate. As authorized by state law, the City Council has approved certain exemptions to its citizens. Residential homeowners qualify for a homestead exemption that is equal to 20% of their appraised value. Citizens who are over 65 years of age qualify for an additional exemption which exempts the first $60,000 of assessed value. Additional exemptions are available for the disabled and veterans. 1-3