House on sale / Taxes

Property taxes are affected by a city's ad valorem tax rate. Valuations are up in 2020.

A public hearing has been scheduled to discuss Taylor’s ad valorem tax rate, also known as property taxes.

On Aug. 13, an ordinance to fix and levy property taxes was introduced during a Taylor City Council meeting. The proposed tax rate is 80.9215 cents per $100 valuation.

“This is the first step in the formal adoption of a property tax rate that supports the fiscal year 2021 budget. The actual adoption,” said Jeffrey Wood, director of finance, “will actually take place after the public hearing on Sept. 10.”

As Wood noted, the proposed rate would match the current tax rate of the 2020 fiscal year.

“On the M&O (maintenance and operations) side, that represents a 1.1% increase,” said Wood. “On the overall rate, it represents a 0.84% increase. That’s because our debt service has gone down this year.”

Although next year’s proposed rate matches the current year, the city would be generating more taxes since property valuations have gone up and residents will be paying more.

“The tax increase comes from the increase in values on the properties that are being taxed,” said Wood, “so what you’re seeing is any additional tax revenue we’re generating is because of an increase in value and not an increase in the rate itself.”

Before the ordinance was introduced, Mayor Pro Tem Dwayne Ariola suggested the city go with the “No New Revenue” (NNR) tax rate (NNR) of 80.2466 cents per $100 valuation. The NNR calculated rate provides taxing units such as a city with the same amount of revenue it received on properties taxed in the previous year.

Ariola cited the COVID-19 pandemic’s effect on citizens as to why the property tax rate should be lowered. He acknowledged that the NNR rate would decrease revenue to the city’s budget for the 2021 fiscal year by approximately $84,000.

To help fill the gap, Ariola noted a recent good run of sales tax revenue. With new neighborhoods filling up and industry moving into the city, the trend might continue.

“While it’s a small deduction, it’s only $84K, but the risk is on the city, not on the constituents,” said Ariola. “and showing our constituents that we understand the tough times that we have right now.”

Councilmember Robert Garcia preferred going with the proposed tax rate as presented.

“We are wanting to rebuild our streets. We are wanting to take care of infrastructure. We are wanting to make a better community,” said Garcia, “and we’re not raising the rate per se. We’re just generating more money.”

Upper limit

During the meeting, the council also voted by a majority vote to raise the ad valorem tax rate’s upper limit from 80.9215 cents to 81.0215 cents per $100 of taxable value. The upper limit establishes the maximum rate that can be approved, but a lower rate can be adopted if the council sees fit.

Councilmember Mitch Drummond motioned for the vote citing a potential budget amendment later in the night. The motion carried 4-1 with Ariola voting against it.

Drummond said during budget talks that he suggested raising the limit in light of the potential funds that could be generated to help the City of Taylor Animal Shelter. According to city staff, the shelter’s proposed budget for the 2021 fiscal year was reduced by $12,300 from the current year due to adjustments for unspent funds. According to Wood, the new maximum tax rate would generate approximately $12,200.

“I figured that 1/10th of a cent would get the animal shelter back to the original budget, and that was my intent,” said Drummond. “Those guys are working hard down there. They’re out of sight, out of mind. It’s difficult. They’ve got a difficult job, and we need to support them.”

After looking into alternate options to help the shelter, there was no objection to introducing the ordinance with the originally proposed tax rate of 80.9215 cents per $100 valuation.

The public hearing on the tax rate will be 6 p.m. on the second Thursday of September.

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