PEARLAND, Texas — The city of Pearland is facing a big budget problem after a miscalculation of property appraisals led them to pass a higher budget than they should have.
Somehow, they said, calculations on property appraisals were inflated by more than $1 billion.
When the city of Pearland sets a budget each year, they look at how much money they’ll be getting from property taxes.
“City property taxes make up about a third of our general fund each year," Budget Officer Eric Roche said.
To do that, they have to look at the appraised value of the property they’ll be taxing to project how much money they will be receiving.
But somehow, when projecting the budget for 2023, the city said the appraisal numbers they received from Harris County were inaccurately calculated by $1.3 billion, making the city believe they would receive more money than they actually would. It's a big reason why they narrowly approved a higher budget.
“We certainly wouldn’t have had this budget," Pearland Mayor Kevin Cole said.
“Ultimately, what that means is there is less property out there for us to apply our tax rate to, less property value. So we will be bringing in less revenue than the city budget initially envisioned," Roche said.
Now, with the correct appraisal calculations, they realize their budget will be $10.3 million short.
So they’ll have to figure out what to do.
“But in this particular budget year, where it may have an effect is we may have to do something about some of the services that we offer. We may have to cut some of those services in order to survive this storm," Cole said.
Councilmember Alex Kamkar said it's a failure on multiple levels.
“We can go blame Harris County, Brazoria County. We can blame all of these people. At the end of the day, it’s our name on the budget, it’s the city of Pearland. We had a gigantic failure here. And now we’ve got to go do $10 million in debt restructuring, budget-cutting to go get right," Kamkar said.
The Harris County Appraisal District responded in a statement saying:
"The information HCAD provided was correct.
"HCAD provides value information to all – over 600 – the taxing jurisdictions in the county and that information is required by the Tax Code and done in accordance with state law.
"However, the Truth-In-Taxation calculation the jurisdictions must do is very complex.
"Any statements about the City of Pearland’s budget should come from the City of Pearland."
Pearland City Council is meeting next Monday where they will begin discussions on what to do.