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Council to request maximum tax rate calculation

Tuesday, May 25, 2021 by Jo Clifton

At next week’s meeting, City Council is expected to approve a resolution directing Chief Financial Officer Ed Van Eenoo to calculate the property tax rate for next year with an increase of 8 percent above the city’s current maintenance and operations rate.

Van Eenoo told the Austin Monitor he is required to make the calculation but that does not mean the city’s tax rate will increase by 8 percent.

Ignoring objections from local governments around the state, the Texas Legislature approved Senate Bill 2 in 2019, directing local governments not to raise property tax rates more than 3.5 percent without the approval of voters – except in a year when the governor has issued a disaster declaration.

Then came the Covid-19 pandemic. Gov. Greg Abbott issued a disaster declaration for all Texas counties on March 13, 2020. He issued a second state of disaster on March 6, 2021, as a result of Winter Storm Uri. Because of those declarations, local governments are allowed to raise property tax rates by 8 percent above last year’s rates. Van Eenoo said Council can vote to raise property taxes by up to 8 percent without going to voters, but raising rates over 8 percent would take voter approval.

In order to move forward with budget calculations, Van Eenoo said, “We have to set a voter approval rate.” He expects to present a preliminary budget to Council on July 9.

Last year, Council approved an increase of 3.5 percent and voters approved an additional 8.75 cents for Project Connect. With the addition of the Project Connect funding, Austin’s tax rate is 53.35 cents per $100 of taxable value.

The city figured the tax bill for the typical homeowner, who was defined as the owner of a median valued home at $326,368. That number is expected to increase considerably as home prices continue to rise. But based on that number, the typical homeowner who is younger than 65 is paying $145.10 per month, or $1,741.17 per year. Next year’s number will be higher, but at this point it’s impossible to say how much higher it will be.

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