Updated 7 p.m. Sept. 19

Leander City Council approved a property tax rate for fiscal year 2016-17 that is lower than the previous year’s rate, marking the fourth-consecutive year the city has lowered its tax rate. During a meeting Sept. 19, City Council unanimously voted for a tax rate of $0.599 per $100 valuation for the 2016-17 fiscal year. The amount is a decrease of $0.03392 from the FY 2015-16 rate of $0.63292 per $100. The approved tax rate is 1.238 percent higher than the effective tax rate of $0.591675, or the rate that would generate the same amount of money as the previous fiscal year. According to the city, the average home in Leander increased in value from $234,851 in 2015 to $262,729 in 2016, or an increase of 11.87 percent. During an Aug. 18 meeting, City Manager Kent Cagle said the city estimates the increase will amount to $19 more per year on the average resident’s tax bill. Council is expected to vote on next year’s budget during its Sept. 29 meeting. The 2016-17 fiscal year starts Oct. 1.

Original story

Though Leander City Council is considering a lower property tax rate for fiscal year 2016-17, homeowners will likely see an increase on their property tax bills next year.

The city of Leander proposed a tax rate of $0.599 per $100 valuation for the 2016-17 fiscal year—a decrease of $0.03392 from the FY 2015-16 rate of $0.63292 per $100. City Council discussed the proposed rate during an Aug. 4 meeting and heard a presentation on the city budget during an Aug. 18 meeting.

The proposed $126 million budget includes investments in existing infrastructure and begins implementing the May voter-approved bond package.

If council members approve the proposed tax rate, City Manager Kent Cagle said FY 2016-17 would be the fourth-consecutive year the city has lowered its property tax rate. Water and sewer rates would also remain steady for the sixth-consecutive year, he said.

Leander Mayor Chris Fielder said the council would not be able to lower the tax rate without the additional buildings and population growth the city has seen in the past few years.

“This is one of the largest tax rate decreases that not only will you see in the region, but it’s the largest that you’ve seen in the city of Leander in over 10 years,” he said. “This puts us back to the tax rate that we were at in 2005.”

The proposed tax rate is 1.238 percent higher than the effective tax rate, so homeowners will likely pay higher bills than in FY 2015-16 because of rising property values. According to the city, the average home in Leander increased in value from $234,851 in 2015 to $262,729 in 2016, or an increase of 11.87 percent.

Cagle said the city estimates the increase will amount to $19 more per year on the average resident’s tax bill.

The proposed budget of $126 million is 18.76 percent larger than FY 2015-16’s budget of $106.1 million. Part of the increase is because of a larger proposed general fund budget.

The approximately $30.4 million general fund revenue includes $2.5 million more in new estimated property tax revenue, mostly because of growth in the city, Cagle said. The total taxable value of properties in Leander increased by 22.58 percent, from $3.1 billion in FY 2015-16 to $3.8 billion, he said.

Property taxes make up nearly half of the city’s revenue each year—more than any other item, Cagle said. Sales tax revenue, building permit fees and construction inspection fees—all of which are related to city’s growth—also bring substantial revenue into the city, he said.

The city’s proposed general fund expenditures total about $30.4 million, and about 46 percent of the amount is for public safety, Cagle said. The proposed budget calls for 31 new full-time positions, 12 of which are in the public safety department, he said.

The proposed budget also includes $16.2 million in bond projects that Leander voters approved in May. The projects include improvements on Metro Drive, Raider Way, East Woodview Drive, North Brushy Street, East Street, San Gabriel Parkway and West South Street at the South West Street intersection.

City Council is scheduled to hold a public hearing on the budget at its Sept. 15 meeting. Council is expected to approve the final reading and vote on the tax rate and budget Sept. 19.