|When a proposed tax rate exceeds the voter-approval rate or the no-new-revenue rate, whichever is lower, State law requires that the City Council must vote to place a proposal to adopt the rate on the agenda of a future meeting as an action item. The rate proposed in the FY 2021-22 Operating Budget is $0.523230 per $100 valuation, which is higher than the 2021 no-new-revenue rate of $0.49771 and the same as the 2021 voter-approval rate of $0.523230. The debt rate is proposed to decrease from $0.120433 to $0.120266, and the proposed maintenance and operations rate decreases from $0.398672 to $0.381257. The economic development rate also decreases in the proposed tax rate to $0.021707. This budget will raise more revenue from property taxes than last year's budget by $4,100,044, which is a 4.3% increase from last year's budget. The property tax revenue to be raised from new property added to the tax roll this year is $2,195,160.
The certified values were received from the Lubbock Central Appraisal District on July 22, 2021. The calculated no-new-revenue rate and the voter-approval tax rate calculations were received from Lubbock Central Appraisal District on August 5, 2021.
The approval of this resolution is not the adoption of the tax rate, but is required for the publication of a proposed tax rate and the scheduling of a public hearing to discuss the proposed tax rate. The rate that is formally adopted by the City Council in September 2021, will follow a public hearing, two readings of the tax ordinance, and public discussion.
The Texas Constitution and Property Tax Code embody the concept of truth-in-taxation to require taxing units to comply with certain steps in adopting their tax rates. The truth-in-taxation laws have two purposes:
1. To make taxpayers aware of tax rate proposals; and
2. To allow taxpayers, in certain cases, to roll back or limit a tax increase.
The truth-in-taxation requirements are contained in the Texas Tax Code, Chapter 26.
No-New-Revenue Tax Rate:
The 2021 no-new-revenue rate is $0.49771. The no-new-revenue tax rate is a calculated rate that will provide the City with about the same amount of revenue it received during the prior year on properties taxed in both years.
Voter-Approval Tax Rate:
The 2021 voter-approval rate is $0.523230. The voter-approval rate is a calculated maximum rate allowed by law without voter approval. The voter-approval rate provides the City with approximately the same amount of tax revenue it spent the previous year for day-to-day operations, plus a 3.5% increase for maintenance and operations, as well as sufficient funds to pay debts in the coming year. If the City adopts a tax rate that is higher than the voter-approval rate, an automatic election must be held on the next November uniform election date.
If the tax rate proposed by the City Council exceeds the no-new-revenue tax rate or voter-approval rate, whichever is lower, the City must follow legislative guidelines for proposing and adopting a tax rate. These guidelines include:
1. The City Council must vote to place a proposal to adopt the rate on the agenda of a future City Council meeting as an action item. The vote must be recorded. This guideline will be fulfilled with the passage of this agenda item.
2. The proposal must specify the desired rate. The City Council cannot vote to adopt a proposal to increase taxes by an unspecified amount.
3. If the motion passes, the City Council must schedule one public hearing on the proposal to increase taxes.
4. The City Council must notify the public of the date, time and place for the public hearing and publish information about the proposed tax rate no later 5 days prior to the date of the public hearing in a local newspaper and publish the notice continuously at least 7 days before the public hearing on the City of Lubbock website and Channel 2.
5. After publishing the required notice, the City must hold the public hearing. Taxpayers must have the opportunity to express their views on the increase at the public hearing. The City Council may adopt the tax rate at the public hearing, but if they do not, they must announce at the public hearing the date and time of the meeting that they will adopt the tax rate.
6. The Tax Code requires that City Council adopt the tax rate no more than 7 days after the public hearing.
The public hearing to discuss the proposed tax rate is scheduled for 5:00 p.m. on September 7, 2021, in the City Council Chambers in Citizens Tower, at 1314 Avenue K.