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File #: ID 15-695    Version: 1 Name:
Type: Action Item
File created: 7/31/2015 In control: City Council
On agenda: 9/1/2015 Final action:
Title: Hold a second public hearing on a proposal to adopt a tax rate of $0.696380 per $100 valuation, which will exceed the lower of the effective or rollback tax rate.
Attachments: 1. Exhibit 1 - Notice of Proposed Tax Rate
Date Ver.Action ByActionResultAction DetailsVideo
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Agenda Information Sheet

DEPARTMENT: Finance

ACM: Bryan Langley

Date: September 1, 2015

SUBJECT
Title
Hold a second public hearing on a proposal to adopt a tax rate of $0.696380 per $100 valuation, which will exceed the lower of the effective or rollback tax rate.
Body

BACKGROUND

The Texas Constitution and Texas Property Tax Code require taxing units to comply with specific guidelines in adopting tax rates. The guidelines are related to a concept known as truth-in-taxation. This concept is a way to make taxpayers aware of tax rate proposals and allow tax payers in certain circumstances, to roll back or limit a tax increase.

The truth-in-taxation guidelines require taxing entities to calculate and publish their effective and rollback tax rates (Exhibit 1 - Notice of Proposed Tax Rate). The effective rate is the calculated rate that would provide the taxing unit approximately the same amount of revenue it received in the previous year on properties taxed in both years. This rate excludes taxes on properties no longer in the taxing unit and also excludes any growth due to new property values. The City of Denton's 2015 effective rate is $0.656271/$100 valuation.

The rollback rate divides the total property tax revenue into support for maintenance and operations (M&O) taxes and debt service taxes. It provides approximately the same amount of revenue as in the previous year for maintenance and operations expenses, plus an extra eight percent, plus the necessary debt service tax rate. If a taxing unit adopts a tax rate higher than the rollback rate, the voters have the option to petition for an election to limit the size of the tax increase. The City of Denton's 2015 rollback rate is $0.721554/$100 valuation.

The City Manager's FY 2015-16 Proposed Annual Program of Services recommends a tax rate of $0.696380 per $100 of valuation, and this rate is $0.040109 above the effective rate. Since the City of Denton's proposed tax rate exce...

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