Businesses will take up slack
Exemption is tax break for homeowners
BY PHIL REYNOLDS

Art by Nature This 'painted' sunset is the work of Mother Nature. A laughing gull, its head returning to winter white, rests on some pilings as the setting suns streaks the clouds with pink, yellow, blue and orange.

Homeowners may be celebrating a 20 percent drop in their homesteads' taxable values, but business owners and renters are wondering what that tax break will mean for their futures.

City council members earlier this year approved a 20 percent homestead exemption for Port Aransas residents who own their own homes. That would mean a home appraised for tax purposes at $200,000 will only be taxed at a value of $160,000. City Manager Michael Kovacs estimated that the owners of a home valued at $250,000 this year would save about $300 in city property taxes.

Nueces County and the Port Aransas ISD already had homestead exemptions in place.

To qualify for a homestead exemption, the resident must own the home and it must be the primary place of residence. That leaves out second homes.

Unlike voting, where a husband can register in one city and the wife in another, getting homestead exemptions on residences in two cities is more difficult.

"With the limited season we have in Port Aransas, you can just about project what you'll make, which basically gets you through the year," said Sam Poteet, who manages properties as CCMS Inc. in Port Aransas.

"The bottom line is that it's going to make it that much more difficult for an entrepreneurial business person to make it here," he said.

Council members agreed when they passed the exemption that to continue to bring the same level of revenue into city tax coffers, businesses and renters would probably be called on to take up the slack.

The city council will be asked on Aug. 31 to approve a fiscal year 2006-07 budget of $22,808,186, up $958,180 from last year's budget. That represents a 7.2 percent increase from the FY 2005-06 budget of $13,226,385. However, much of that budget increase comes in spending for programs for which the city will be reimbursed, will receive grants, or has already committed money to - such as the nature preserve, which is financed by certificates of obligation issued in 2004 as well as grants from state and federal agencies.