Kerr County Commissioners approve higher tax rate calculation for flood recovery

Kerr County commissioners on Monday unanimously approved allowing the tax assessor-collector to calculate property tax rates using a higher percentage allowed for disaster areas, a move designed to help the county manage cash flow for flood recovery expenses while awaiting federal reimbursements.

The decision authorizes Tax Assessor-Collector Bob Reeves to calculate the voter-approval tax rate using 8% rather than the usual 3.5% over the no-new-revenue rate for Kerr County, Lateral Roads and the Lake Ingram Estates Road District — all entities located in areas declared disaster zones following the July 4 floods that killed at least 106 people and left more than 150 missing.

“Our whole budget period is being eroded away literally,” Judge Rob Kelly said in supporting the measure, which takes advantage of provisions in Section 26.042 of the Texas Property Tax Code that allow special calculations for disaster areas.

Cash Flow Management for Recovery Costs

Reeves emphasized that the higher calculation authority “is not to pad a budget or anything like that. It’s for the unforeseen costs that have arisen out of the disaster.” He clarified that the authorization “doesn’t mean the tax rate will go up that much,” as that decision would be left to commissioners during the budget process.

A commissioner explained the rationale: “The reason that it’s 8% instead of the usual 3.5% … they raise it when you have like this and it’s more cash flow management.”

The primary concern driving the decision is the need to pay disaster-related expenses upfront while waiting for reimbursement from the Federal Emergency Management Agency, which can be significantly delayed. Officials cited a previous FEMA project that took “at least two if not three years” for reimbursement.

The higher potential tax rate would ensure the county could “at least pay the contractors now and then get reimbursed later” for flood recovery work.

Potential Tax Impact

The disaster provision provides additional tax capacity of approximately $0.019 per $100 of assessed property value compared to normal calculations. For a typical $400,000 home, this could translate to an additional $76 in annual property taxes, or about $6.35 per month, if commissioners chose to utilize the full disaster rate allowance.

However, Reeves emphasized that the authorization “doesn’t mean the tax rate will go up that much,” as the actual tax rate decision remains with commissioners during the budget process. The measure simply provides more flexibility for addressing unexpected disaster-related expenses.

According to the county’s 2024 tax rate notice, Kerr County’s current no-new-revenue tax rate stands at $0.4233 per $100 of property value, while the voter-approval tax rate is $0.4772 per $100. The voter-approval rate typically represents the highest tax rate a taxing unit can adopt without holding an election.

Under normal circumstances, the voter-approval rate for maintenance and operations can only be calculated at 3.5% above the no-new-revenue rate. The disaster designation allows for the 8% calculation, providing more flexibility for unexpected recovery expenses.

The county maintains significant fund balances, including $19.1 million in the general fund and $201,988 in the flood control fund, according to recent financial reports.

Widespread Disaster Impact

The July 4 floods devastated the Texas Hill Country, with the Guadalupe River rising more than 20 feet in some areas. The disaster has prompted ongoing discussions about potentially draining major water bodies including Ingram Lake, Nimitz Lake and the Flat Rock Park dam area to recover victims and vehicles buried beneath debris.

Numerous eyewitness accounts describe vehicles and RVs floating down the Guadalupe River during the flood, with some riverside businesses capturing video footage of vehicles with headlights still on being swept downstream.

More than 2,200 state and federal personnel remain deployed to assist with search and recovery operations, which have extended all the way to Canyon Lake as crews look for missing victims and submerged debris.

Administrative Efficiency

The court order approving the tax calculation change was developed by outside counsel and reviewed by county legal staff. Reeves indicated he would begin the new calculations regardless of the decision before the next commissioners meeting scheduled for July 28.

The measure represents one of several administrative adjustments commissioners have made to address the unprecedented disaster, including authorization for extensive overtime pay for county employees working flood response and the use of county properties as central assistance locations for flood victims.

A burn ban remains in effect countywide as recovery efforts continue throughout the region.