ROCKPORT, Tx — A Rockport citizen is claiming the city's recently adopted property tax rate is illegal for multiple reasons, while city officials maintain they have operated within the law.
The city adopted a budget of $64.3 million that included a property tax increase, which was reported by KRIS 6 News in September as a 10% increase.
Rockport citizen Andrew Kane said he believes the tax rate is "illegal on four different points.
The first allegation concerns accounting practices. "They've moved maintenance and operation items into the I&S [Interest and Sinking]," Kane told KRIS 6 News. "They're borrowing money every year to pay for normal maintenance and operations so they can therefore have a 3.5% M&O tax increase, but the total property tax increase this year was 10.33%."
In response to this claim, Rockport City Manager Vanessa Shrauner wrote, "This is incorrect. The City has adopted its budget in compliance with normal accounting practices for governmental entities."
Shrauner added that the city "worked hard to ensure that we stayed below the voter approval rate," and after citizen input, further cut the proposed I&S tax rate.
Kane's second point involved a failed $5.1 million tax anticipation note. "The state law says that you cannot set the tax rate with the anticipation of debt service of a loan you haven't gotten yet," Kane alleged. "And we absolutely set our tax rate in anticipation of a $5.1 million loan, and we didn't lower the tax rate."
The specific item, listed on the City's September 23 agenda as "Ordinance 1993," proposed the issuance of "approximately $5,100,000" for purposes including street, drainage, and public safety facility improvements, as well as acquiring vehicles and equipment. The agenda item was pulled from consideration during that meeting because the city's audit was not complete.
Shrauner also refuted this, stating, "Again, this is incorrect. The GO Refunding Bonds are secured by ad valorem taxes and are properly placed for recovery from the I&S tax rate. We received this opinion from our bond counsel."
The third reason Kane gave was a failure to meet public notice requirements. "The state mandates that a notice of tax increase be posted on the website before they set the rate." He continued, "The city of Rockport absolutely never put on the website that notice of tax increase," he claimed.
In her email, Shrauner wrote, "Finally, this is likewise a mistaken belief. The City posted the state mandated tax rates in compliance with state law." She provided a link to the notice on the city's website.
The other point of contention revolves around Senate Bill 1851, a new state law. Kane believes the city is in violation because it has not completed its state-required audit, which would legally limit it to a lower "no-new-revenue" tax rate.
When asked for comment on this, City Manager Shrauner said, "The City believes that seeking to apply SB 1851 to its recently adopted tax rate is misplaced." She cited the bill's language, stating it applies to "a tax year that begins on or after the effective date of this Act." Shrauner clarified that the city's recent tax imposition was for the 2025 tax year and that the law will begin to apply for the 2026 tax year.
The dispute over the new state law prompted Kane to contact the Office of the Attorney General. In a letter to Kane, the OAG confirmed it received his concerns and outlined the bill's provisions, stating, "SB 1851 authorizes the OAG to determine whether a city complied with municipal auditing requirements. If the OAG determines that a municipality did not comply with such requirements, then the municipality is prohibited from adopting an ad valorem tax rate that exceeds the no-new-revenue tax rate."
The letter also noted the OAG had "no further comment on this matter at this time."
Regarding the ongoing debate, Shrauner concluded, "I understand that everyone may not agree with what was funded, what was cut, and what taxes are being imposed. This is legitimate public debate among which reasonable minds may disagree. However, disagreeing with a matter of policy does not make the action illegal."
When asked if he believed the city would rectify the situation, Kane expressed skepticism. "Unfortunately... our city council and city staff will do everything they can to accounting tricks and legal loopholes to skirt the law... I have zero faith that our city council will direct our staff to do the right thing."
He encouraged more citizen involvement, stating, "Change happens at the ballot box."
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