Recently, the Lufkin City Council proposed a plan to reduce property taxes by 2 cents. In spite of a $1.4 million budget shortfall for 2011, the city council concluded that with the rise in property values and with lower debt payments, it could give the saving back to us. Paul Parker, the city manager of Lufkin, stated the money could have gone to operations and maintenance, but the council elected not to keep the money. He stated there will be no new hires in 2011and there have been cuts in some departments.
The council should be applauded for this action. In this difficult economic environment, there are not many cities, counties, or states in a position to cut taxes. In fact, most are looking for new tax revenues to make up for shortfalls in their budgets. The fiscally responsible Lufkin city council has determined it can manage the city finances without keeping the money.
We hope so, while the city council has proven to be good managers of the taxpayers money, we are concerned that once taxes are cut, it becomes difficult to raise them if the revenue is needed. Look at the challenge the state of Texas faces.
Cutting taxes is always politically popular, but not always economically prudent. The Lufkin city council has decided the cut is possible and we trust their judgment. As long as city services are not severely impacted, and the rainy day fund is adequately funded, we are comfortable with this decision.