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The County Tax Rate. South Texas County Judges & Commissioners June 11, 2014. Objectives. Explain Administration of Truth-in-Taxation Present Steps in Adopting a Tax Rate Explain Rate Calculations Emphasize Importance of Publication of Propose Rate
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The County Tax Rate South Texas County Judges & Commissioners June 11, 2014
Objectives • Explain Administration of Truth-in-Taxation • Present Steps in Adopting a Tax Rate • Explain Rate Calculations • Emphasize Importance of Publication of Propose Rate • Explain Regulations Regarding Tax Increases • Explain Reasons for Public Hearings McCreary, Veselka, Bragg & Allen, P.C.
Truth-in-Taxation and the Tax Calendar APPRAISAL STAGE Chief Appraiser Delivers Notices of Appraised Value Appraisal Review Board Hears Property Owner Protests ARB Certifies the Appraisal Roll ASSESSMENT STAGE Governing Body • Proposes Tax Rate • Publishes tax rate notice • Holds public hearings • Administers rollback election McCreary, Veselka, Bragg & Allen, P.C.
Important Dates • April 1 - Chief Appraiser Sends Notices to single family residences • May 1 - Chief appraiser Sends Notices to Any Other Properties Requiring Notice • July 25 - Appraiser Certifies Appraisal Role • August - Cities & Counties Propose Tax Rates and Publish Notice • Aug-Sep - Taxing Unit Adopts Budget and Tax Rate • Sep 30 - Deadline to adopt tax rate • October - Assessor prepares and mails tax bills McCreary, Veselka, Bragg & Allen, P.C.
Terms to understand • Effective Tax Rate (ETR): • the tax rate that will generate the same amount of tax levy as last year’s tax rate. • Rollback Tax Rate (RTR): • If the adopted rate exceeds the Rollback Tax Rate, the voters may petition for an election to reduce the tax rate to the RTR McCreary, Veselka, Bragg & Allen, P.C.
The Effective Tax Rate • Simplest form: • Last year’s tax levy This year’s value = the EffectiveTax Rate • Generally: • If value increases, the ETR goes down; • If value decreases, ETR goes up. McCreary, Veselka, Bragg & Allen, P.C.
Rollback rates & Public Hearings • Rollback rate: breaks out maintenance and operations (M&O) and debt service (I&S). Units can have an 8% cushion in M&O funds, plus the debt to be paid. • RTR = Effective M&O X 108% + Debt rate (I&S) • Public hearings are triggered if the proposed tax rate exceeds the lower of the ETR or the RTR McCreary, Veselka, Bragg & Allen, P.C.
Truth-In-Taxation Local Government Code Section 140.10 - Effective Jan 1, 2014 • Governing Body Must • Propose the Tax Rate to Fund Expenditures • IfProposed Rate Exceeds the lower of the ETR or RTR, Set Public Hearings • Publish Notice of Proposed Rate • Hold Two Hearings, if applicable • Adopt Tax Rate • Administer Rollback Election McCreary, Veselka, Bragg & Allen, P.C.
Step 1: Decide How Much Tax To Levy • Expenditures Based on Cost of Services and Approved Bonded Debt • Truth-in-Taxation defines the Debt Component of Tax Rate • If Proposed Tax Rate Exceeds the lower of the ETR or RTR, Governing Body Must Vote to Propose a tax increase: McCreary, Veselka, Bragg & Allen, P.C.
Step 2: Vote to Propose a Tax Increase • Vote Must Be Recorded • Must Specify Proposed Tax Rate • If Motion Passes, Governing Body Must Set and Announce Date, Time & Place for 2 Public Hearings • Adopt the stated rate at a future meeting McCreary, Veselka, Bragg & Allen, P.C.
Step 3: Calculate and Publish Required Rates • All entities must calculate effective and rollback rates • Under the changes made in SB1510, Counties and Cities must publish notices BEFORE September 1 • Can be published or mailed to property owners McCreary, Veselka, Bragg & Allen, P.C.
Step 4: Publish Notice – By September 1 • Governing Body Must Notify Public of the proposed tax rates, and • Date, Time and Place of Public Hearings, if a tax increase is being proposed • Notice is also to be Posted on Taxing Unit Website McCreary, Veselka, Bragg & Allen, P.C.
Notice of Proposed Tax Rate - No Tax Increase McCreary, Veselka, Bragg & Allen, P.C.
Notice of Proposed Tax Rate - Tax Increase McCreary, Veselka, Bragg & Allen, P.C.
Step 5: Hold a Public Hearing • Quorum of Governing Body Must Be Present at Hearing • Taxpayers Must Be Able to Express Views • Tax Rate Cannot Be Adopted at This Hearing • Governing Body Must Follow Tight Timetable McCreary, Veselka, Bragg & Allen, P.C.
Step 6: Adopt the Tax Rate in a Public Meeting • If the Proposed Rate does not Exceed the lower of the ETR or the RTR, the Tax Rate May be Adopted after the Notice is Published McCreary, Veselka, Bragg & Allen, P.C.
Step 7: Adopt the Tax Rate in a Public Meeting • Notice of Meeting Must Be Posted • Meeting Must Be Open to the Public • Adoption of Tax Rate Must Be a Separate Agenda Item • Budget Must Be Adopted Before Tax Rate • Counties with a population of more than 225,000 are not required to adopt the budget before adopting a tax rate. McCreary, Veselka, Bragg & Allen, P.C.
Step 7: Adopt the Tax Rate in a Public Meeting • Tax Rate Must Be Adopted by Official Action – Set out in written Resolution, Ordinance or Order • Taxing Unit Paying Both Maintenance and Operations (M&O) and Debt Service Must Adopt One Tax Rate for M&O and One for Debt Service McCreary, Veselka, Bragg & Allen, P.C.
Step 7: Adopt the Tax rate in a Public Meeting • At Least 4 Commissioners Court Members Must Be Present at Meeting for Adoption of Tax rate • At Least 3 Must Vote for the Rate • The county judge is considered a member for these purposes. • Must Adopt Rate Before September 30 or the 60th day after the date the certified appraisal roll is received. McCreary, Veselka, Bragg & Allen, P.C.
Step 7: Adopt the Tax Rate in a Public Meeting • Failure to Comply • Owner May Seek Injunction • Stops taxing unit from sending tax bills • Owner must act before unit delivers all of its tax bills McCreary, Veselka, Bragg & Allen, P.C.
References • Comptroller Property Tax Assistance Division Website • Texas Property Tax Code • Local Government Code • Art VIII Texas Constitution McCreary, Veselka, Bragg & Allen, P.C.
