HomeMy WebLinkAboutCP 261 CIT' FO WO , TEXAS
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COUNCIL PROPOSAL
Date; File Number. Subject Council Proposal to Direct Staff to Prepare an Ordinance to Call an Election on the Question of
2-20.2007 Whether to Implement a Freeze on the Amount of Property Taxes Imposed on Residential Homesteads
261 Owned by Persons Aged 65 and Over and Persons with Disabilities in accordance with Article VIII,Sec.
1-b(h)of the Texas Constitution
Proposed By: ::t4ty
Manager's Review: Page:
Chuck Silcox Attorney's Review PAGE 1 OF 3
It is proposed that the City Council direct staff to prepare an ordinance calling an election on the
question of whether to establish a freeze on the amount of property taxes imposed on residential
homesteads owned by person aged 65 years or older and persons with disabilities, in accordance
with Texas Constitution,Art. VIII, Sec. 1-b(h).
DISCUSSION:
In 2003, Texas voters adopted an amendment to the Texas Constitution which allowed a county,
city or town, or a junior college district to freeze the total amount of ad valorem taxes imposed
on the homesteads of persons with disabilities or persons sixty-five years of age or older.
The constitutional amendment provides that the tax freeze on city property taxes can be
implemented by official action of the governing body of the city. In the alternative, upon receipt
of a petition signed by 5% of the registered voters of the city, the city shall call an election to
determine by majority vote whether to adopt the tax freeze. The Texas Attorney General's office
has determined that "official action" of the city may take the form of either (a) adoption of an
ordinance or resolution by the governing body implementing the tax freeze, or (b) calling for a
binding election on whether to adopt the tax freeze, even in absence of a voter petition. (Opinion
No. GA-0222)
The proposed ordinance would call for an election on the question of whether to establish a
freeze on the amount of property taxes imposed on residential homesteads owned by person aged
65 years or older and persons with disabilities, in accordance with Texas Constitution, Art. VIII,
Sec. 1-b(h).
If approved by the voters,the constitution provides that the tax freeze cannot be rescinded by the
city council. The Texas Attorney General has likewise determined that the tax freeze cannot be
rescinded by an election initiated by voter petition (GA-0222).
Homeowners qualify for the freeze for an entire tax year if they turn 65 or become disabled
during that year. The freeze would not apply to taxes based on increased value from
improvements to the property. A tax freeze would expire on January 1 of a tax year in which the
property is no longer used as a residence homestead of if the property owner,did not qualify for
the disability or senior exemption
❑ LEGALITY
❑ FISCAL NOTE
❑ CITY MANAGER'S COMMENTS
❑ CITY POLICIES MANUAL
CIT FO WO , TEXAS
e
�a
COUNCIL PROPOSAL
Date: File Number. Subject:Council Proposal to Direct Staff to Prepare an Ordinance to Call an Election on the Question of
2-20.2007 Whether to Implement a Freeze on the Amount of Property Taxes Imposed on Residential Homesteads
261 Owned by Persons Aged 65 and Over and Persons with Disabilities in accordance with Article VIII,Sea
1-b(h)of the Texas Constitution
Proposed By: City Manager's Review: Page:
Chuck Silcox City Attorney's Review: - PAGE 2 OF 3
LEGALITY:
The City Attorney finds that this proposal is legal and within the authority of the City Council.
FISCAL NOTE:
If a tax freeze is implemented for citizens who are disabled and/or sixty-five (65) and over, the
fiscal impact to the City would be the loss of approximately $1,173,831 in property tax revenue
for Fiscal Year 2007-2008. The five-year cumulative impact would be approximately
$18,645,262. The potential impact of the proposed Tax Freeze is described in Informal Report
Number 8827.
CITY MANAGER'S COMM ENT:
It is the recommendation of the City Manager that the City Council not implement a freeze on
property taxes for persons aged 65 years and older and persons with disabilities for the following
reasons:
1) The tax freeze would result in significant revenue loss when compared to what
could have otherwise been collected,thereby hindering the Council's ability to:
(a) maintain or improve the level of City Services,or
(b) reduce the property tax rate;
2) The City already grants a generous 65 years and Older Senior homestead
exemption of $40,000.00 and a $40,000 Disability Homestead Exemption, in
addition to a 20%general homestead exemption;
3) The 65 Years and Older Tax Freeze and Disabled Persons Tax Freeze cannot be
"means tested,"meaning wealthy senior citizens and disabled persons will benefit
as well as those of more modest means; and
❑ LEGALITY
❑ FISCAL NOTE
❑ CITY MANAGER'S COMMENTS
0 CITY POLICIES MANUAL
CRT Fa wo , TEXAS
COUNCIL PROPOSAL
Date: Fite Number: Suljet t:Council Proposal to Direct Stam to Prepare an ordinance to call stn Elecom on the Question of
2.2044 Whether to lmpiemeat a Freese on the Amount of Property Taxes Mnposad on ResideriN Homme
261 owned by Pereoi AqW 65 rind over end Persons with Disablildes in accordwm with Article MND Seo.
1-b(h)of the Texas CanstRution
Proposed Sr. CRY manaiwe Revir+w. Page:
Chuck Siloox City Attorney's Revisor PAGE 3 OF 3
4) The 65 Yeas and alder TEx Freeze would result in inequities with seniors
owning homes of similar val}x, purchased at different times. The same result
would occur under the Disability Tax Freeze among disabled home owners.
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O LEGAlr1Y
O FISCAL NOTE
O CITY MANAGER'S COMMENTS
O CITY POLICIES MANUAL