HomeMy WebLinkAboutIR 7044 INI:ORMAI REPORT TO CITY COUNCIL MEMBERS No. 2&=
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;6s 4oAr�� To the Mayor and Member Of the City Council
August 13, 1985
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X�'�'* Subject: 1985 NET EFFECTIVE TAY RATE
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The calculation of the 1985 Net Effective Tax Rate*, as required by
the State Property Tax Code , has now been completed resulting in a
rate as follows :
Effective M&0 Rate------------------$ . 4367/$ 100
Effective I&S Rate------------------$ . 2812/$100
1985 EFFECTIVE TAX RATE $ . 7179 /$100
Limitations with Effective Rate
Three Percent of the Effective Rate
The Property Tax Code allows a taxing unit' s governing body to
adopt a tax rate that is not more than 3 percent higher than the
effective rate without holding a public hearing or publishing
notices . However, if the actual rate exceeds the 3 percent limit,
the taxing unit must hold a public hearing to consider the rate .
The 3 percent limit is calculated according to the following steps :
(a) 1985 effective rate------------$. 7179
(b) Multiply by 1 . 03---------------X 1 .03
(c) 1985 tax rate that
does not exceed 3%-------------$ . 7394/$ 100
Eight Percent of the Effective Rate
If the governing body exceeds the effective rate by more than 8
percent , taxpayers may call an election to reduce the tax rate .
The following calculation determines the maximum rate that a govern-
ing body may adopt without exceeding 8 percent :
(a) 1985 effective rate------------$ . 7179
(b) Multiply by 1 . 08---------------X 1 . 08
(c) 1985 tax rate that
does not exceed 82-------------$ . 7753/$ 100
The proposed 1985 tax rate of $ . 7655/$ 100 exceeds the effective
rate by 6 . 63 percent which would require the holding of a public
hearing, but does not establish the basis for a potential public
election .
Attached is a copy of the Notice of Effective Tax Rate (Attachment A)
which the City is required to publish in a local newspaper .
L ISSUED BY THE CITY MANAGER --- FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No.7 4 41 ` P a g e 2
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To the Mayor and Member of the Cite Council
Subject: 1985 NET EFFECTIVE TAX RATE
The current schedule is for the Tax Assessor/Collector to have
the notice published on August 15 . A new interpretation by
the State Property Tax Board requires that if any fiscal changes
affecting the calculation of the rate should occur between the
time the notice is published and the time the governing body is
ready to adopt the tax rate , then the unit must delay adopting a
rate and follow the publication procedures again.
So that the Council might assess the effect of the proposed rate
on property owners at various appraised values , Attachment B is
also being submitted.
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A/ Douglas Harman
City Manager
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*The Property Tax Code , Chapter 26, defines an effective tax
rate as one that will produce ( 1) sufficient revenue to meet
the taxing unit ' s debt payments for the current year , and,
(2) the same amount of operating revenue levied on properties
taxed in the prior year (and taxable in the current year) .
L ISSUED BY THE CITY MANAGER --- FORT WORTH, TEXAS