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Hutto tax hike could help city rebound

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Cities all over the country are trying to balance their budgets.

The City of Hutto's budget problems center around the housing market. Those problems have amounted to $53 million in debt, but city officials say they have a plan.

The Hutto City Council is asking residents to pay 1.2 percent, or about $16, more per year in taxes. The city plans to use those tax dollars to get out of debt.

"I'm glad we’re not in Austin. Hutto is more conservative with spending. They're not going to waste it on little trains that no one rides and stuff like that," Homeowner John Rohowetz said.

Debt in the suburban town has risen by $20 million over the last five years.

Hutto City Manager David Mitchell said since Hutto is a big first-time homebuyers market. It boomed and then fell hard when the housing market collapsed.

In 2009, the average home was worth $137,000. It's gone down by $10,000.

"When it comes to property values, they look at comparable sales, so they had a lot of short sales and foreclosures to look at as they're valuing our market and, correspondingly, it brought our values down," Mitchell said.

But it wasn't just real estate that hurt the city. Mitchell said many residents lost their jobs which was another consideration the council considered before pitching a tax increase.

Council members say they’re also looking to bring in more businesses and commercial growth to help alleviate their taxes.

The city won Rohowetz’s support. He’s says they’ve got it as long as they make every dollar count.

"No, it's not that much. At what point do I draw the line, probably anything $100,” Rohowetz said.

The Hutto City Council will vote on the tax rate Sept. 6. A public hearing will be held Thursday at the Hutto City Hall at 7 p.m.

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