Mayor Sylvester Turner plans to ask city voters next fall to do away with a decade-old cap on city revenues, but for now he's stuck with it.

So City Council on Wednesday will consider cutting Houston's property tax rate for the third time in three years, saving taxpayers money but also straining city coffers at a time when rising pension and debt costs risk forcing widespread layoffs and service reductions next summer.

The rate proposed to be set - 58.642 cents per $100 of property value - is the lowest since 1987, and represents an 8.2 percent drop since the cap took effect.

"We're a growing, dynamic, vibrant city and we have a lot of needs," Turner said. "People want us to be cost efficient and fiscally prudent and we are demonstrating that, but people want more police out on the street - that costs money. They want more paramedics - that costs money. They want better streets, flooding, those things cost money. For us to be forced to lower our property rates … it doesn't make good sense."

Voters OK'd the revenue cap in 2004, amending the city charter to limit the annual growth of property tax revenue to the combined rates of inflation and population growth, or 4.5 percent, whichever is lower. Voters tweaked the cap in 2006, allowing the city to raise an additional $90 million for public safety spending.

Houston exhausted that breathing room two years ago, and, with property values still on the rise, has had to crank back its tax rate each fall to avoid collecting more revenue than is allowed.

If the cap had not come into force, Houston would have been able to collect a projected $220 million more in the current fiscal year and the two prior ones, officials estimate.

During the same time period, the owner of a $200,000 Houston home with a standard homestead exemption will have saved about $84 in taxes, compared with the cap never having taken effect.

"People really haven't seen the benefits of that," Turner said. "They're not feeling that."

Even though the tax rate is falling, it doesn't mean residents' city taxes are, because the tax rate is applied to the value of each property and most Houstonians' home values have been rising.

Must eliminate waste

Councilman Dave Martin, who represents conservative Kingwood and Clear Lake, acknowledged $84 over three years is "not that big of a deal" to the average citizen. But Martin said he opposes lifting the cap until savings are found in departments he views as inefficient, such as the Houston Fire Department.

"We cannot ask the taxpayers for more money without looking at ourselves and asking, 'Are we operating this city at maximum efficiency?' The answer to that is no,'" Martin said. "Until you can get the city of Houston to eliminate the waste that we have in various departments, the citizens of the city should demand that we not remove the revenue cap, no matter if it saves $1."

Councilman Jerry Davis, who represents Acres Homes, Fifth Ward and other underserved neighborhoods on the northside, said his residents do not credit the revenue cap for saving them money and do not blame it for hurting city services, because many do not realize it exists at all.

Davis believes if his voters were informed about the impact of the cap, however, they would vote to reject it.

Balance cost, needs

"Yes, it's a savings and we're all grateful for savings," Davis said. "But at the end of the day, would you give up $20 or $30 annually to make sure you have another police officer patrolling your area more frequently? My constituents will give up that $20 annually."

The city of Houston is just one of eight or so local governments to which local residents pay property taxes, and the city rate is roughly half that of Houston ISD's tax rate.