Let’s Talk TRUTH About Addison’s BALANCED Budget

Let’s Talk TRUTH About
Addison’s BALANCED Budget
By Susan M. Halpern
Former Addison Councilmember (1992-1999)

Addison’s budget is once again being attacked by two negative candidates. Their websites contain alarmist fearmongering that has no basis in TRUTH. Let’s talk about it.

Both candidates falsely claim that Addison’s budget is not balanced. On one website we are told: “Addison can’t keep spending more money than it brings in.” Another website claims that “over the last 4 years, we have been going deeper and deeper into debt to pay for basic services.” It appears that “basic services” is a reference to traditional government services such as public safety (police and fire), parks & recreation, administration and the like.

These claims are utterly false. Addison does not now, and has not ever engaged in deficit spending. Among other things, Addison’s Charter forbids it. That also means that Addison has not gone into debt to fund “basic services.” Even the most cursory reading of Addison’s budget confirms this TRUTH. In fact, .441109 of the .608676 tax rate is allocated for general government maintenance and operations, with .167567 allocated for retirement of general obligation long-term debt. (More about municipal debt later.)

The candidates making these false claims have clearly not educated themselves about Addison’s budget.

Of course, these misleading statements are accompanied by commitments to maintain Addison’s high level of services. But you can’t have it both ways. Taxes fund the high level of services. And this gets us to the heart of municipal budgeting which is, at base, setting priorities and then ensuring that those priorities are adequately funded. Stated simply, high levels of service happen because Addison devotes resources to them. It is about the dollars. So, promising high levels of service but concurrently complaining about taxes and implicitly promising to lower taxes is utter fiction. It is pandering for votes by telling people what they want to hear without regard to reality.

The TRUTH is that Addison is a great value. To understand that, remember that taxes are the product of two components: property value and the tax rate. Two points here. First, Addison’s property tax base is largely commercial, which is great for residents. In fact, more than 85% of Addison’s property taxes come from commercial properties. That means residents pay less than 15% of the property taxes Addison collects. Second, Addison’s current tax rate is .608676 per $100 of appraised value. That means a resident owning a $300,000 house pays $1,826.03 in property tax to Addison. That is less than a fourth of the total property taxes Addison residents pay. The rest go to entities such as DISD and Dallas County, all of whom set their own tax rates.

But let’s drill down a little more, and consider how savings to Addison residents would impact Addison’s overall budget. Using the same example of a $300,000 house, a one cent decrease in Addison’s tax rate would save that homeowner $30.00. For the entire YEAR. But the impact on Addison’s budget would be far greater, because that decrease would apply to the entire assessed taxable value, which is in excess of $4.9 BILLION. Which means that taking one cent off Addison’s tax rate would save our hypothetical homeowner $30.00 for the YEAR, but would decrease property tax revenue by slightly less than half a million dollars. That’s a dramatic loss in revenue to Addison.

So, here’s what it really comes down to. What are you willing to cut from the budget to save $30.00 per year? Or $60.00? Public safety staffing? Public works projects? Capital projects for which the voters authorized the issuance of bonds in 2019? All of which focuses us on the notion that the real issue is value. And by all accounts, Addison residents are satisfied with the value they are receiving, including the high levels of service that have always been Addison’s trademark. The TRUTH is that Addison’s budget is serving the interests and needs of the community, and that is the TRUE measure of Addison’s success.

Here’s the other thing. The alarmist views of these candidates are not shared by the professionals. On this point, Addison has enjoyed the highest possible rating from Standard & Poor’s (AAA) for years. And, in 2018, Addison was upgraded by Moody’s from a high rating (Aa1) to the highest possible rating (Aaa), which Addison maintains at present. There are only ten other cities in all of Texas who share the highest ratings from both agencies. This speaks volumes about the strength of Addison’s financial position.

Here’s my last point for now. Nothing in life is free. Addison is a beautiful community with superior services and amenities, and its tax rate and budget reflect what is necessary to maintain what its residents expect. So, when these candidates start their fearmongering about taxes and budgets, ask them what services they intend to cut to achieve a $30 or $60 or $100 annual savings for individual homeowners. Viewed in the proper terms, their misleading claims very quickly fall apart.

We need councilmembers who understand Addison’s budget, and who are willing to move forward in a positive direction grounded in a frank and TRUTHFUL discussion of taxes. We have enjoyed just such a council for four years under Mayor Joe Chow’s leadership and with the participation of councilmembers like Lori Ward and Tom Braun. We are fortunate to have strong candidates like these two and Kathryn Wheeler, all of whom embrace responsible budgeting.

Let’s maintain our momentum with solid, BALANCED budgets that deliver the services that make Addison great. Addison residents deserve no less. It is The Addison Way.