Title
HOLD a public hearing on the proposed tax rate for the fiscal year beginning October 1, 2024 and ending September 30, 2025.
Body
DATE: September 3, 2024
TO: Kent Cagle, City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Tax Rate Public Hearing
BACKGROUND AND FINDINGS:
On August 6, 2024, City Council set the preliminary tax rate at $0.6573 per $100 valuation, adopted a resolution setting a public hearing for September 3, 2024 on the preliminary tax rate for the proposed FY 2025 Budget, and scheduled the adoption of the tax rate for September 3, 2024. The preliminary tax rate establishes the ceiling for the FY 2025 Budget. The actual tax rate can be equal to or lower than the preliminary tax rate and not higher.
The proposed FY 2025 Budget was submitted to City Council using a tax rate of $0.6573. After the certified tax roll and tax rate calculations were received, the proposed tax rate was able to remain at $0.6573 which brings in an additional $533,984 as compared to the revenue that was included in the proposed budget. The no-new-revenue tax rate for FY 2025 is $0.5996 and the voter-approval tax rate for FY 2025 is $0.7114. Since the preliminary tax rate was set above the no-new-revenue tax rate, Texas Property Tax Code requires a public hearing be held prior to the adoption of the final tax rate.
Senate Bill 2 from the 86th Legislature changed the laws regarding public hearings for tax rates. The requirement went from two public hearings to one public hearing. In addition, the allotment of time between the hearing and adoption was shortened. As a result, there was a change allowing the governing body to vote on the proposed tax rate at the public hearing per Property Tax Code Section 26.06(d). If the governing body does not adopt the tax rate at the public hearing, the meeting to vote on the tax increase may not be held later than the seventh day after the date of the public hearing per Section 26.06(e)....
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