The city of Plano will provide 3% raises to city employees without increasing tax collections on existing properties after Plano council members approved a new budget with a lower tax rate.
Plano City Council approved a $602 million budget Sept. 9 that will add the fewest new personnel the city has seen in years. The council also approved a property tax rate of $0.4482 per $100 property valuation, a reduction from last year that will pull in roughly the same amount in revenue from existing properties as values go up.
The lower rate adopted by council, also known as the “effective tax rate”—the rate necessary to bring in the same amount of revenue as was collected in the previous fiscal year—was a prominent topic on the campaign trail in the last two Plano City Council election cycles. Four of the council’s eight members ran on a platform of preventing the city from raising property tax revenues.
In past years, city budget officials warned against adopting the effective tax rate. But this year, they said they believed they could fund necessary city services and raise salaries for city staff—in part because of the new positions and funding approved in previous years.
The city also engaged in a bit of creative budgeting to get the numbers to work. About $5 million in sales tax revenue usually presented at the end of each fiscal year will instead be accounted for in the initial budget.
This number, with its inclusion of predicted revenue, more accurately reflects the amount of sales tax the city expects to collect, Budget Director Karen Rhodes-Whitley said. It also means the city will have less money to present to the council at the end of the year for further spending.
In addition to an increase in budgeted sales tax revenue, the city anticipates total property tax revenue to increase because of new properties added to the tax roll, according to city budget documents.
The tax rate approved Sept. 9 represents only a portion of Plano residents’ property tax bills. Plano property owners also pay taxes to Collin County, Collin College and their local public school districts.