To note: This is the fourth in a series of blog posts on the FY2022 budget and the tax rate proposal.
It’s property tax rate fixing season, and you’ve probably read how most central Texas tax entities lower their tax rates.
This is also true for the town of Round Rock. The proposed tax rate of 39.7 cents is 4.2 cents lower than the current rate. This is because property values have increased dramatically and there is an inverse relationship between values and tax rates – as values increase, the base tax rate decreases.
What we will also highlight (note the title above) is the tax Payment for the average taxpayer residential property increases. At Round Rock, it goes up by about $ 2 per month. The increase is needed to start paying off the $ 30 million debt approved by city council earlier this year for the last installment of the Driving Progress road improvement program of $ 240 million over 5 years.
We will have more on the road program below. First, we think there are other parts of the property tax story that you will find interesting.
There has been a lot of commercial and residential development over the past year. In fact, a value of $ 381 million was added to the City’s property base, which now stands at $ 17.7 billion. At the proposed tax rate, the new value will generate $ 1.5 million in new income. This is certainly not an insignificant sum, but it would make it possible to build about a quarter of a mile of a lane on the current project of widening the Boulevard de l’Université.
As noted in our first budget blog post, City Council is considering a $ 525 million budget that meets the growing demands of our growing community with the high-value services that the citizens of Round Rock have come to expect, especially for staff. additional public safety. Although significant investments are planned for infrastructure, no increases are proposed for the tariffs for water, wastewater and stormwater utilities.
Our city council understands that no homeowner likes paying more property taxes, which is why we are working hard to diversify our sources of income. What difficulty? For every dollar we collect in residential property tax revenue, we collect $ 4.25 in other revenue sources for our general fund, which pays for basic services like public safety, parks, and the library.
Here’s another way of looking at it: Residential property taxes are expected to generate $ 25.5 million in General Fund revenue, which is about 19% of the General Fund. This is not enough to cover the annual budgets of the police or the fire department.
Commercial properties, which represent only 8% of the total number of plots, generate 45% of property tax revenues. This is one of the main reasons why economic development is a priority for city council.
Impact of sales tax
Sales taxes are a major factor in mitigating property tax rates in Round Rock. Sales taxes represent 43 percent of the projected $ 133 million in total General Fund revenue, while property taxes represent 35 percent.
We expect sales tax revenues to continue to grow in FY 22, driven by a strong local economy and continued population growth. This is great news for all property taxpayers, because of the 2 cents we collect for every dollar in taxable local sales, there is half a cent that goes directly to the reduction in property tax.
We expect that half a cent will save 13 cents on the property tax rate for FY22. This will save the median homeowner $ 31 per month, or 25%, on their monthly tax bill. .
Return to the road program. The $ 30 million bond certificates issued this spring were the third of five planned bond issues totaling $ 140 million to help fund the Driving Progress program.
Potential projects in this round of funding include improvements to: Deepwood Drive, Gattis School Road, Kenney Fort Boulevard, Logan Street, McNeil Road, North Mays Street, Oakmont Drive, Old Settlers Boulevard, Red Bud Lane, RM 620, SH 45 Frontage Road, University Boulevard, Wyoming Springs Drive, County Road 112 and South Mays Corridor.
Like our diversified approach to General Fund revenues, there are sources other than property taxes that pay for road improvements, such as road impact fees which are paid by developers to cover part of the costs of the road. expansion of our transport network made necessary by their projects. We are also aggressively seeking federal grants and working in partnership with Williamson County to share costs for regional projects.
Sales tax revenues also fund a significant number of major transportation projects. We’ll have more on that in an article next week.
A piece of the property tax pie
As mentioned above, the City is not the only entity that taxes your property. For Round Rock owners, municipal property taxes represent about 19% of your total bill. The balance goes to Round Rock ISD (54 percent), Williamson County (19 percent), Austin Community College (5 percent), Williamson County Road District (2 percent), and the Control District and Upper Brushy Creek water improvement (1 percent). ).
We think it’s worth noting how we stack up against our peers across the state. As the graph below shows, our tax rate is among the lowest in the state for comparable cities. As evidenced by our recent recognition for “Leading the Way” in providing exceptional service, we believe the Town of Round Rock offers exceptional value for the taxpayer dollars you pay. This is how we are building towards the future with the FY 22 budget.