Plano City Council rejected a plan supported by its two newest members that would have effectively committed the city to a tax rate cut nearly four times larger than the reduction proposed by city staff.
The council on Monday directed city staff to publicize a proposed property tax rate of 46.86 cents per $100 valuation—which, if approved later this year, would be a 1 cent rate cut—as part of the state’s Truth in Taxation laws. The decision came after council members pointedly sparred over a separate motion from Council Member Anthony Ricciardelli intended to cut the rate to 44.13 cents per $100, a move that would have kept city property tax revenue roughly equal to last year’s collections.
Although the council has yet to formally approve a tax rate for the 2017-18 fiscal year, Monday’s vote directs the city staff to post a notice in The Dallas Morning News announcing the proposed rate, a necessary step before it holds public hearings on the matter and ultimately approves the final rate in September.
Even if the council later approves the proposed 1 cent rate reduction, taxpayers are expected to pay higher bills next year as property appraisal values continue climbing throughout North Texas.
Ricciardelli’s motion to lower taxes further than the staff recommendation was a result of promises he made on the campaign trail before his election in June, he said. When asked what expenditures he would recommend cutting from the proposed budget to compensate for the loss of revenue, he floated the idea of reducing the city’s contributions to its capital reserve fund.
But five other council members declined to support Ricciardelli’s proposal after Plano Director of Budget and Finance Karen Rhodes-Whitley said the city’s regular contributions to its capital reserve fund helps preserve its AAA credit rating. If that rating were to drop, she said, the city would lose more money in debt service payments down the line.
Council Member Rick Grady argued against the proposal, saying it would only save his household about $80 per year in property taxes while slashing revenue for city services by millions of dollars.
Rick Smith, another council member to earn a spot on the council in June’s runoff elections, cast the other vote in favor of Ricciardelli’s proposal to cut the tax rate by 3.73 cents per $100.
"We need to be the best stewards of our citizens' money that we can be," Smith said.
The city will now move forward with a proposed tax rate of no higher than 46.86 cents per $100, although council members could once again discuss the prospect of lowering that rate further before approving the final budget in the fall.
After Monday's meeting, Ricciardelli declined to say whether he plans to bring up another proposal to further reduce the city's tax rate.
Plano City Council rejects bid to cut property tax rate beyond staff proposal
Plano City Council on Aug. 14 rejected a plan to a plan to lower the city's tax rate beyond levels proposed by city staff.