HomeMy WebLinkAbout(0010) IR 10303 - Effective and Rollback Tax RatesINFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 10303
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1673
To the Mayor and Members of the City Council
August 13, 2019
Page 1 of 2
SUBJECT: SUBMISSION OF 2019 EFFECTIVE AND ROLLBACK TAX RATES
This informal report has been prepared to inform the City Council of the 2019 Effective and Rollback
Tax Rates for use in the budget discussions regarding the financial plan for fiscal year 2020. The
Effective Tax Rate reflects the rate which would generate the same revenue as the prior year based
solely on property that was taxable for both years. The Rollback Tax Rate serves as a cap on
property tax rates, thus limiting the taxing units' ability to make material increases over the prior
year's rate.
Pursuant to Texas Property Tax Code Section 26.04(c), the Effective Tax Rate =
(Last Year's Levy — Lost Property Levy)
(Current Total Value — New Property Value)
Property tax rates are comprised of two separate rates, Maintenance & Operation (M&O) and
Interest & Sinking (I&S). As its name implies, the M&O rate provides operating revenue for the
General Fund while the I&S rate is provides resources to repay debt obligations through the Debt
Service Fund.
The 2019 Effective Tax Rate is $0.726558 / $100 assessed valuation
The 2019 Rollback Tax Rate is $0.789191 / $100 assessed valuation
The 2018 Adopted Tax Rate is currently $0.7850 / $100 assessed valuation
If the City Council chooses to adopt a tax rate that exceeds the effective rate of $0.726558 per
$100 assessed valuation, it would need to adopt a resolution to consider a tax revenue increase
and hold two public hearings on the tax revenue increase.
Staff will be recommending adoption of a tax rate of $0.74750 per $100 of assessed valuation in
connection with the fiscal year 2020 budget. This proposed rate is lower than the current actual
adopted tax rate of $0.7850 per $100 of assessed valuation, and, while this is a lower tax rate, it
exceeds the effective tax rate. Therefore, a resolution to consider a tax revenue increase will be
presented for the City Council's consideration at its August 13 meeting. If the resolution is
approved, the state -law -mandated notices will be published and the public hearings scheduled.
If the City Council adopts a total tax rate that exceeds the rollback rate, taxpayers may petition for
a rollback election by gathering signatures from at least seven percent (7%) of the registered voters
shown on the most recent official voter list. If the rollback election succeeds, the City would be
forced to adopt the rollback rate.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 10303
PATE$
443 OP?
�
0
r vn
1673
To the Mayor and Members of the City Council
August 13, 2019
Page 2 of 2
SUBJECT: SUBMISSION OF 2019 EFFECTIVE AND ROLLBACK TAX RATES
This year, the City will not be subject to a rollback election unless it adopts a tax rate higher than
$0.789191 per $100 of assessed valuation.
Pursuant to Section 140.010 of the Local Government Code notice of the proposed tax rate will be
published in the newspaper on August 17, 2019, and additional information regarding the rollback
and effective tax rates will be provided on request. The tax rate (M&O and I&S components
combined) is scheduled to be adopted on September 17, 2019.
Of note, the Property Tax Reform and Relief Act of 2019, or SB2, was approved by the Texas
Senate during the 86' Legislature and subsequently signed into law. While there is no immediate
impact to the process of adopting property tax rates for cities this fiscal year, the bill includes
significant changes to the current process along with new requirements, which will be implemented
going forward in the budget process for next year.
If you have any questions, please contact Terry Hanson, Assistant Director, Performance and
Budget Department, at (817) 392-7934.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS