For the first time in years, the City of Plano is not raising property taxes. Instead, the city has revealed plans to adopt a budget based on the “effective” tax rate—also called the “no new revenue” tax rate because it collects the same amount of property tax revenue overall from the same properties taxed the previous year.
Over the past five years, the average Plano homeowner’s city property tax bill has skyrocketed by 40 percent.
Newly elected council members Shelby Williams and Lily Bao campaigned on reining in the city’s runaway spending and taxation. Council members Rick Smith and Anthony Ricciardelli, elected in 2017, did as well but have been outnumbered. Now council can no longer muster the 5-3 vote required to pass a tax rate above the effective rate.
In a preliminary overview of Plano’s 2019-20 budget presented to council members on Wednesday, City Budget Director Karen Rhodes-Whitley recommended a city property tax rate of 44.85 cents per $100 of assessed taxable valuation.
At the proposed rate, the average Plano homeowner will pay $1,362 in city property taxes on a home valued at $379,629. In 2018-19, the average homeowner paid the city $1,359 on a home valued at $369,050.
Williams noted Wednesday the effective rate is calculated based on the aggregate value of all taxed properties in the city. He said individual homeowners’ results will vary based on valuations and exemptions.
The preliminary effective tax rate was calculated based on a total assessed property value of $45.1 billion, a 5.5 percent increase over last year. Commercial property accounted for 52 percent of the city’s taxable value and 88 percent of new growth.
A final property tax rate will be determined at an August 12 budget work session and public hearing. Council votes on the final budget and tax rate on September 9.