HomeMy WebLinkAbout(0004) IR 20-10459 - 2020 No New Revenue.Voter Approval Tax RatesINFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 20-10459
ATEP August 11, 2020
To the Mayor and Members of the City Council
Page 1 of 2
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167,3 SUBJECT: SUBMISSION OF 2020 NO -NEW -REVENUE AND VOTER
APPROVAL TAX RATES
This informal report has been prepared to inform the City Council of the 2020 No -New -Revenue
Tax Rate and the Voter -Approval Tax Rate (formerly the effective tax rate and rollback rate,
respectively) for use in the fiscal year 2021 budget and financial planning discussions.
The No -New -Revenue 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 Voter -Approval 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 No -New -Revenue 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 provides resources to repay debt obligations through the General
Debt Service Fund.
The 2020 No -New -Revenue Tax Rate is $0.777377 / $100 assessed valuation
The 2020 Voter Approval Tax Rate is $0.807135 / $100 assessed valuation
The 2019 Adopted Tax Rate is currently $0.747500 / $100 assessed valuation
If the City Council chooses to adopt a tax rate that exceeds the no -new -revenue rate of $0.777377
per $100 assessed valuation, it would need to adopt a resolution to consider a tax revenue increase
and hold one public hearing 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 2021 budget. This proposed rate is the same as the current actual
adopted tax rate of $0.74750 per $100 of assessed valuation and does not exceed the no -new -
revenue tax rate.
Per the Property Tax Reform and Relief Act of 2019, if the City Council adopts a total tax rate that
exceeds the voter approval tax rate, it must be adopted by August 2411 (71 days before the next
uniform election date) and triggers an automatic election. No petition is required. If the voter
approval election succeeds, the City would be forced to adopt the voter approval tax rate.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 20-10459
ATEP August 11, 2020
To the Mayor and Members of the City Council
Page 2 of 2
a
167,3 SUBJECT: SUBMISSION OF 2020 NO -NEW -REVENUE AND VOTER
APPROVAL TAX RATES
Pursuant to Section 26.06(c) of the Texas Tax Code, Notice of the proposed tax rate will be
published in the newspaper and posted on the City's homepage by September 8, 2020 and
additional information regarding the No -New -Revenue and the Voter -Approval tax rates will be
provided on request.
Although not required by state law, the City will hold a public hearing September 15', 2020 to
consider the proposed tax rate. The tax rate (M&O and I&S components combined) is scheduled
to be adopted on September 22, 2020.
The Property Tax Reform and Relief Act of 2019, or S132, was approved by the Texas Senate
during the 861" Legislature and subsequently signed into law. Many changes to the process were
implemented this year, including changes to the rate calculations, reduction of public hearings
required for tax increase to one, transparency measures, and posting requirements.
If you have any questions, please contact Terry Hanson, Assistant Director, Planning & Data
Analytics Department, at (817) 392-7934.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS