Tax Rate

Plano City Council members discuss the proposed tax rate for the 2017-18 city budget.

Kelsey Samuels/Staff Photo

The Plano City Council voted Monday night on what ceiling tax rate to adopt and publish to the public. In a 7-0 vote, members decided to publish a tax rate of 0.4686 per $100 of appraised value to the public, an average annual cost of about $1,321 a year.

Deputy Mayor Pro Tem Ron Kelley started the discussion by suggesting the council adopt the rate and work to possibly reduce it by another cent.

Councilman Anthony Ricciardelli made a statement that during his campaign he pledged to support the effective tax rate of 44.13 to help alleviate property tax burdens. However, every cent reduced to the tax rate is a loss of about $3.9 million in revenue. If the city were to adopt the effective tax rate, that would mean a loss of $10.5 million in revenue and an average savings of $4.20 per month for homeowners.

Kelley argued the city could only adopt the effective tax rate if the budget cut funding from public safety or infrastructure, which makes up two-thirds of the city’s budget.

“There’s nothing more that I would like to do than adopt the effective tax rate, but here’s my problem: To do that, you have to take from public safety,” he said. “We can’t say we’re for our police and our firemen if we don’t give them the tools and the manpower that they need.”

He also said the effective rate would cut into infrastructure funding, which would mean more incurred cost for delayed road projects.

Still, Ricciardelli motioned for the council to adopt the effective tax rate. Once they opened the conversation to discussion, Councilwoman Angela Miner asked Ricciardelli, “Where are you willing to cut?” Ricciardelli said the city could reduce its contribution to the Capital Reserve Fund to offset the loss of revenue.

City budget director Karen Rhodes-Whitley warned council members that touching the capital reserve fund could impact the city’s AAA bond rating, which saves the city from additional interest on its debt.

The average home’s appraised value is $352,486. With the proposed 46.86 rate, residents could pay $1,321 a year, down $29 from last year. Mayor Pro Tem Rick Grady said his home value was above average appraised value, yet a rate reduction would save him about $6 extra a month - the price of a tall vanilla latte triple shot - but would cost the city $10.5 million in necessary services.

Councilman Rick Smith said although Grady may not need the extra $6 a month or $81 a year, it could mean more for others.

“That’s your money. That’s not our money. I know a lot of people where $81 or $6 extra a month for an extra latte, maybe that means a lot.”

He added Plano should be leaders and see the effective 44.13 tax rate as a goal to work toward, much like Collin County did. Grady interrupted Smith to say the county has access to $150 billion in property tax revenue, which isn’t comparable to Plano.

Councilwoman Kayci Prince said, “When I think about what great leaders do, they balance what’s good for today but also what’s very wise for tomorrow." She said she was happy about a 1-cent reduction, and she’d like to work on a 2-cent reduction if possible, as long as it doesn’t sacrifice the city’s quality of service or its future health.

She also added the capital reserve fund is extremely important to the city, and “I’m not for sacrificing that and sacrificing the future health of our city just so we can decrease the tax rate more today.”

Kelley added that the property tax issue isn’t a local problem that Plano can resolve on its own. Property tax and school finance needs resolution from the state, he said.

Ricciardelli spoke up to clarify he didn’t want to deplete the city’s capital reserve fund, but only reduce its contribution slightly to offset the tax rate. Mayor Harry LaRosilliere made a final comment that the effective rate would no doubt impact the city’s quality of service.

“The idea that we can reduce $10.5 million in revenue from our city and not affect service is a fantasy,” he said.

In the end, Ricciardelli’s motion to adopt the effective tax rate failed 2-5, and Grady motioned to publish the proposed 46.86 tax rate, which passed unanimously. The council also proposed the city look for a way to reduce the rate by another penny, or about $3.9 million, by the final Sept. 11 vote.

Once the rate is published, the city can only lower the proposed rate, so with 46.86 as the ceiling, the only way to go is down. The council will have three more public meetings to discuss budget and the tax rate. 

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