How Will the Bonds Affect the Tax Rate?

Passage of the bond propositions on the November ballot will not likely raise the county tax rate, according to the county’s financial officers.

Hays County’s financial advisor and the county auditor, who is hired independently of Commissioners Court, both said the county should be able to manage up to $250 million in new bond projects without raising the tax rate. The combined total of Proposition 1 and Proposition 2 – if both pass – is approximately $237.8 million.

The current tax rate for Hays County is 46.0 cents per $100 of real property value (as of October 1, 2016), down slightly from last year’s rate of 46.70 cents.

Individual tax bills could go up or down in future years, based on rising or falling appraisals on individual property, but the county’s financial officers calculate the bonds can be paid off with no increase in the tax rate. That, they said, is based on the county’s financial condition and a projected increase in the overall tax base as the county grows. 

Click here to see the trend lines on the county’s tax base in recent years and details about assumptions used by financial advisors and the Hays County Commissioners Court. This presentation also includes information about the accuracy of the tax projections used for the county’s last bond program, in 2008.

The county currently holds a AA bond rating from both the Standard and Poor’s and Fitch rating agencies. Investment ratings range from AAA to D.

“The County’s rating is very strong at AA and sits only two notches from the highest rating possible of AAA, which permits the County to borrow at a very low interest rate. This is a great position to be in while making the capital investment that this County is making,” according to Dan Wegmiller, the county’s Financial Advisor and a managing director with the firm Specialized Public Finance. Wegmiller made those remarks at Commissioners Court. To see fuller comments from the Financial Advisor during a report to Commissioners Court this summer, click here.

To see what the bond ratings agencies say about Hays County, its debt management policies, and its investment rating, click here.

“Conservative budgeting for many years has allowed Hays County to add to its financial reserve, putting us in an excellent position financially,” said County Auditor Bill Herzog, addressing the county Commissioners Court on budgeting and debt in general at a meeting several months ago. “As we take on debt to keep up with current growth and prepare for future growth as one of the fastest growing counties in the state, the incoming population will be helping to pay the costs of our improved infrastructure.”