Frisco’s mayor suggested the city’s various homestead exemptions offered to Frisco residents, including one for senior citizens, may be repealed if local voters are allowed to weigh in on higher city tax bills.
The state’s threshold for annual tax increases of 8 percent has exceeded the inflation rate for more than 30 years. Weeks ago, Frisco Mayor Jeff Cheney came out strongly against Senate Bill 2, which would reduce this “rollback” rate to 2.5 percent annually and trigger an automatic election for voters to approve tax hikes over and above it. He called the proposed voter-control measure “nonsense” on social media.
More recently, Cheney posted another attack on SB 2 on his official Facebook page. In the post he suggested that, if SB 2 passed, all homestead exemptions for Frisco residents would be eliminated because “the cap plus the exemption will be unsustainable in the near future during the high growth period.”He also said the exemptions for senior citizens would be at risk “especially in times of recession.”
Cheney’s post suggested the City of Frisco could have a revenue problem if voters limited tax hikes to 2.5 percent per year. But the city’s own comprehensive annual financial report shows the city is flush with cash, and that its revenue streams have grown faster than the city’s population.
According to the report, over a 10-year period, Frisco’s growth in property tax revenues has outstripped population growth plus inflation, at 94.8 percent and 80.6 percent respectively. Total tax revenues for Frisco increased 84.2 percent over the same time period, which still outstrips population growth plus inflation.
From a growth perspective, Frisco is raking in more than enough revenue, even with the current exemptions in place.
It’s important to remember that SB 2 and its companion bill in the Texas House, House Bill 2, would not cap a city’s total revenue growth to 2.5 percent per year; it would only limit how much tax levies can increase on property owners who already live there. In other words, the limit does not apply to new tax revenue from growth.
The city could collect additional tax revenue from new growth and economic development each year plus 2.49 percent more from a tax hike, all without voter approval.
Frisco does not currently have a revenue problem and would not face a hard cap by SB 2/HB 2.
Frisco taxpayers should expect their own mayor to fight for their interests and not the interests of the city government.