State law (Section 26.05(a)), Tax Code) requires the governing body to adopt a tax rate for Fiscal Year (FY) 2020. State law also provides that the tax rate consists of two components, a Maintenance and Operations (M&O) rate and a Debt Service rate, and that each of those components must be approved separately.
The proposed tax rate breakdown is as follows:
| Total Tax Rate |
$0.591133 |
| M&O - General Fund |
$0.411833 |
| M&O - Economic Development |
$0.023716 |
| M&O - Infrastructure Investment Fund |
$0.006201 |
| Debt Service |
$0.149383 |
The vote on the ordinance setting a tax rate that exceeds the effective rate must be a record vote. The motion to adopt an ordinance setting a tax rate that exceeds the effective rate must be made in a specific form. The effective tax rate for FY 2020 is $0.552371 and the proposed tax rate is $0.591133. Based on this proposed rate, the motion must be made as follows:
"I move that the property tax rate be increased by the adoption of a tax rate of $0.591133, which is effectively a 7.02 percent increase in the tax rate."
State law requires that, if the tax rate exceeds the effective maintenance and operations rate, the ordinance must include the following language regarding the impact the tax levy has on a home valued at $100,000:
THE TOWN OF ADDISON ADOPTED A TAX RATE THAT WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR’S TAX RATE. THIS TAX RATE WILL EFFECTIVELY BE RAISED BY 8.0 PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $34.40.
Additionally, the state requires specific language that must be included on the home page of the website:
THE TOWN OF ADDISON ADOPTED A TAX RATE THAT WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR'S TAX RATE. THIS TAX RATE WILL EFFECTIVELY BE RAISED BY 8.0 PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $34.40.
The City Manager’s proposed budget included a total tax rate of $0.591133, which exceeded the effective tax rate of $0.552371, but is not higher than the Rollback Rate of $0.591133, which is the highest rate the Town may adopt before voters are entitled to petition for an election to limit the rate to the rollback rate. This rate is higher than the FY 2019 tax rate. At its August 13, 2019 Council meeting, the City Council took a vote of record to conduct two public hearings on the tax rate which were held on August 27, 2019 and September 3, 2019.
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