Plano Leaders Consider Raising Property Tax Rate

For the first time in 16 years, Plano leaders could soon raise the city’s property tax rate, citing slowing growth and the higher costs of maintaining its infrastructure and quality of life.

The city’s tax rate has held steady at 41.76 cents per $100 of assessed property valuations for three years. City Manager Mark Israelson recommended in his proposed budget to again maintain that rate in the upcoming fiscal year, which begins Oct. 1, but also highlighted the city’s need for more cash.

Citing that need, the City Council decided last month to establish a debt ceiling – more than 2 cents higher than the current rate. The mayor and some council members then signaled support for raising property taxes to that ceiling, which is proposed at 44.06 cents per $100 of valuation.

Council members are scheduled to vote on the city budget and new tax rate on Monday.

Impact of the Proposed Tax Hike

At that ceiling, a homeowner with a median homestead taxable value of around $390,000 would pay more than $1,700 in property taxes, about $200 more than in the current fiscal year, city documents show.

The proposed tax hike comes as other Collin County cities are lowering their own property taxes. In recent days, McKinney slashed its property tax rate by about 0.3 cents.

“The City of Plano should be run like a business, not like a household,” Plano Mayor Pro Tem Maria Tu said at a meeting last month in support of raising the tax rate. “We have to have buffers. We have to have money for rainy days.”

Revenue Increase and Emergency Funds

The rate would raise more total property taxes than last year’s budget by $16.6 million, city documents show, of which nearly $2.9 million will be raised from new development added to the tax roll this year.

Council member Bob Kehr agrees the city needs more emergency funds.

“I think that we’re a storm, a wildfire away from being in real big trouble,” Kehr said at an August council meeting. “I see that as a priority.”

Concerns and Opposition

But the push for a higher tax rate is not universal. One Plano council member, Vidal Quintanilla, expressed concern about raising the rate to the highest allowed without an election.

“Cost of living is going up, food is going up, groceries are going up for everyday citizens,” he told the council. “It’s just a bigger pill for me to swallow.”

Plano’s Tax Rate Compared to Surrounding Cities

Plano currently has a lower tax rate than some surrounding cities like Dallas, Frisco and Richardson. The city also provides the maximum 20% homestead exemption, a $40,000 senior and disability exemption and a tax freeze for residents who are at least 65.

With little undeveloped land remaining, the potential for new housing development – which could grow sources for additional tax revenues – will depend largely on redeveloping existing commercial sites, according to the city’s comprehensive plan.

Conclusion

As Plano reaches build-out, city leaders are grappling with keeping up with demand for city services without the hope of much more expansion to its tax base.

Council member Steve Lavine said the extra boost in revenue could help the city tackle upcoming one-time expenses, like addressing stream bank erosion in Plano and public safety staffing. The city could also use the money to pay interest on its bond debt and to acquire more land, Lavine said.

City leaders also cited the need for improving Plano’s downtown and municipal facilities, funding economic development and hosting community events.

FAQs

Q: What is the proposed property tax rate in Plano?

A: The proposed property tax rate is 44.06 cents per $100 of valuation.

Q: How much more would a homeowner with a median homestead taxable value of $390,000 pay in property taxes?

A: The homeowner would pay about $200 more than in the current fiscal year, for a total of over $1,700.

Q: Why do city leaders think a higher tax rate is necessary?

A: City leaders believe a higher tax rate is necessary to keep up with demand for city services, maintain infrastructure, and provide a buffer for emergency funds.

Q: Are there any concerns about raising the tax rate?

A: Yes, some council members have expressed concern about raising the tax rate to the highest allowed without an election, citing the impact on everyday citizens.