At their Aug. 11 meeting, Plano City Council members discussed the preliminary FY 2025-26 budget and voted to set a property tax rate ceiling, which established the maximum rate the city could adopt without triggering an election.
What you need to know
Plano officials cannot raise property taxes higher than $0.4406 without voter approval and can now only lower the rate.
Mayor Pro Tem Maria Tu said Aug. 11 council should propose the highest allowed rate to provide flexibility for adjustments towards a lower final rate.
“We all want to save money, ... but we do want the best services,” Tu said. “Let us finalize our budget, and then [we’ll] come to the real tax rate that we are going to live with.”
Breaking it down
Director of Budget and Research Karen Rhodes-Whitley presented an update Aug. 11 on Plano’s projected budget, outlining Plano’s property tax rate options for FY 2025-26:
Rhodes-Whitley also said regardless of if Plano raises the property tax rate, residents may still see higher bills because the average taxable home value in Plano has increased by 2.1% in the last year.
Plano’s property tax rate has remained flat at $0.4176 since fiscal year 2022-23, and the current proposed budget for FY 2025-26 includes the same rate.
City Manager Mark Israelson said Plano officials also need to consider the ongoing legislative uncertainty, including discussions on the future voter-approved-rate and whether lawmakers will reduce the cap on property tax growth from 3.5% to 2.5%.
“There’s going to be continued needs for programs and services going into the future,” Israelson said. “So the question becomes, what do you choose to fund and how do you choose to fund them?”
Also on the agenda
At an Aug. 14 budget work session, council also reviewed a five-year financial forecast prepared by NewGen Strategies & Solutions, which showed city expenditures are expected to grow an average of 3.2% per year.
Matthew Garrett, NewGen strategies representative, said if Plano adopted the no-new-revenue rate of $0.4194, which is higher than the currently proposed property tax rate, expenses would exceed revenues by FY 2026-27, reducing the city’s working capital.
Garrett said that adopting the voter-approved-rate would give the city more room to increase service levels.
While the current proposed budget does not add new programs or services, city officials also discussed funding specific needs such as the Downtown Plano Public Improvement District and city-wide erosion control projects.
Plano has been working to address ongoing streambank erosion issues since authorizing a study in 2022 that evaluated more than 3,000 locations and ranked them by severity of erosion.
Director of Engineering Caleb Thornhill said 40 locations in Plano, with nine being private property, were rated “critical” and require repairs that would cost approximately $10 million.
Looking ahead
Plano officials have several meetings ahead of approving the budget in September, including:
- Aug. 21: town hall meeting
- Aug. 25: public hearing on tax rate
- Sept. 8: council vote on budget, adopt tax rate
- Oct. 1: new fiscal year begins
