Property owners in the City of Orange will get a 7 percent cut in their taxes this year and most Chemical Row plants will be safe from annexation for the next 15 years. The plants that made an agreement with the city will also pay more under a special industrial district contract. The Orange City Council approved the agreements plus the new tax rate during a called meeting Friday morning.
The agreements with the plants are extended from seven years to 15 years. The city this summer began a procedure to annex four of the plants that were under negotiations for new contracts. The tax contracts are part of a long-standing state law that allows industries outside a city's limits to make in-lieu-of-tax payments with that city for a percentage of property taxes that would be paid if the plants were inside the city. The contracts keep the plants from being annexed. Orange has had the agreements for more than 40 years.
DuPont plant manager Bobby Laughlin told KOGT that the company is very pleased to settle terms with the city, particularly with the long-term contract. ‘That put certainty in our operations,” he said. The company can now go 15 years without any concern of annexation. The contract is also an example of the company working to benefit the community because the new contracts mean taxes can be lowered for citizens, he said. ‘We’re very proud to be in the Orange community.’
Orange City Attorney John Cash Smith called the agreements ‘A homerun for the City of Orange and a double for the industries that signed.’ Smith and City Manager Shawn Oubre led the city’s side of negotiations under the direction of City Council.
The city’s tax rate will now be 70 cents per $100 valuation down from 74.5 cents per $100 valuation. Under the new rate, the owner of a house valued at $100,000 with a homestead exemption will pay $36 a year less, down from about $596 to $560. The owner of $100,000 of business or rental property without homestead exemption will save about $45 a year, down from about $745 a year to $700. Oubre said the city’s property tax rate has dropped during the past few years down from 85 cents per $100 valuation. The budget this year will be a little more than $13 million in the general operating fund that uses the tax and industrial contract money. The total budget with water and sewer plus sanitation and other funds is about $29 million. Those funds are self-supporting, relying on income for services to pay the bills.
Oubre said the city has kept expenses in the general budget to needing only a 2 percent annual increase for the past few years. He pointed out that the low increase comes even after the costs of electricity and gasoline have gone up. Also the city has given cost-of-living pay raises to employees.
The percentage of income from the industrial district contracts had been going down, he said. As the industrial income goes down, homeowners and businesses have paid a larger percentage. In the current budget, 32 percent of income comes from the industrial contracts, 29 percent from property taxes, 15 percent from sales taxes and 8 percent from franchise taxes. In 2007, the industrial contracts covered 34.35 percent of the income and property taxes covered 22 percent. Oubre said the city council had told him to change the percentages. Under the new terms, the industries will pay 38 percent of the city’s income and the property taxes will be about 27 percent.
This year the contracts for Invista, DuPont, DuPont warehouse, Chevron and Solvay Solexis were expiring. Oubre said the city reached out to other plants whose contracts would be expiring in two years. ‘Our direction (from the council) was that in two years this deal would not be available,’ Oubre said. Firestone, Print Pak and Honeywell agreed to new 15-year-contracts. Lanxess, Sabine CoGen and the Akrotex warehouses did not agree to the new contracts. (The main Akrotex plant is within the city limits and pays full property taxes.)
-Margaret Toal, KOGT-