Cities of Leander, Cedar Park update budgets, adjust tax rates to manage growth

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Cities of Leander, Cedar Park increase budgets, adjust tax rates to manage growth

As Cedar Park and Leander continue to experience population growth, local leaders are adjusting budgets to meet demands.


Cedar Park lowered its tax rate Sept. 26. The city’s total operating budget is about $152 million, an about 7% increase from last year.


“This budget delivers value to our residents with continued public safety excellence and maintaining and enhancing our community assets that make Cedar Park the best place for families,” City Manager Brenda Eivens said in a statement.


Leander’s $168.89 million budget is an about 6% decrease from last year. The decrease is due to the completion of several capital projects.


Leander lowered its tax rate Sept. 19. With Senate Bill 2 going into effect next year—which limits property tax growth—some cities are responding by increasing their tax rates now.


Leander Mayor Troy Hill said the city is justified in not raising the rate.


“[Senate Bill 2] limits cities’ abilities to respond if the economy goes south,” Hill said. “I don’t think that gives cities the right to raise taxes this year when the economy is doing so well.”



CEDAR PARK FY 2019-20 budget


Cedar Park’s population is estimated to increase 2% from 79,259  in 2019 to 80,844 in 2020, according to city estimates. The fiscal year 2019-20 budget focuses on investing in essential services and infrastructure and managing the city’s ability to service and buy down debt, according to city officials.


Totals may be off due to rounding.







What could I pay in city taxes?


Cedar Park City Council voted to decrease the city’s tax rate Sept. 26. Residents will likely see higher property taxes on their October 2019 property tax bill, though, due to rising property values.








Average tax bill


A Cedar Park resident with an average-valued home would pay this amount in city taxes annually.








Contributing factors of a tax bill


The October 2019 tax bill is calculated using the 2019 taxable value and the tax rate adopted in September 2019. Taxable value is the market value minus any exemptions.







What does a city budget fund?



  • General city operations such as parks and recreation, street maintenance, police and fire

  • Debt payments for projects such as a new library and Anderson Mill Road improvements








How does Cedar Park allocate funds?


Here is a look at the city of Cedar Park’s budgeted expenses for FY 2019-20.







General fund breakdown


The city’s general fund is the largest budget category. Half of the general fund’s expenditures is going toward public safety.







Cedar Park capital improvement projects


The city funds large projects for new and improved infrastructure that can take years to complete.







Cedar Park employees


Additional city employees in FY 2019-20: 3 new positions

  • 2 Police

  • 1 Library







LEANDER FY 2019-20 budget


Leander’s population has increased by about 27% to 63,527 people since 2017, according to estimates by the city. Two major priorities for Leander’s fiscal year 2019-20 budget include adding key staff positions to meet the growing community’s increasing service demands and development pace as well as continuing to complete voter-approved transportation and park projects, according to city spokesperson Mike Neu.







What could I pay in city taxes?


Leander City Council decreased the city’s tax rate Sept. 19. Residents will likely see higher city property taxes on their October 2019 property tax bill, though, due to rising property values.








Average tax bill


A Leander resident with an average-valued home would pay this amount in city taxes annually.








Contributing factors of a tax bill


The October 2019 tax bill is calculated using 2019 taxable value and the tax rate adopted in September.







What does a city budget fund?



  • General city operations such as parks and recreation, street maintenance, police and fire

  • Debt payments for projects such as Fire Station No. 5 construction and city infrastructure improvements for the Northline development








How does Leander allocate funds?


Here is a look at the city of Leander’s budgeted expenses for FY 2019-20.







General fund breakdown


The city’s general fund is the second-largest budget category, after the capital projects fund, for FY 2019-20. Public safety makes up the largest percentage of the general fund expenditures at $19.5 million.







Leander capital improvement projects


The city funds large projects for new and improved infrastructure that can take years to complete.







Leander employees


Additional city employees in FY 2019-20: 24 new positions

  • 1 Information technology

  • 1 Planning

  • 4 Public works

  • 2 Engineering

  • 2 Parks and recreation

  • 6 Police

  • 1 Fire

  • 1 Building inspections

  • 1 Code enforcement

  • 4 Utility







Property tax 101


Here is a glossary of terms related to property taxes.

Property tax rate
The rate at which a property is assessed, listed as cents per $100 of value.

TAKEAWAY: The property tax rate is made up of of maintenance and operations and debt service components.

Taxable value
It is the value the property tax assessor uses to calculate how much a property owner owes.

TAKEAWAY: Exemptions for homesteads, 65 and over, disabled persons and veterans reduce the taxable value and can vary by entity.

Effective tax rate
It is the property tax rate that generates the same revenue as the prior year, based on the new year’s total value of taxable property less new value.

TAKEAWAY: As property values rise, a city’s total value of taxable properties increases, requiring a lower effective tax rate.

Rollback tax rate
It is the highest a city can raise its property tax rate without possible petition for an election.

TAKEAWAY: Historically, the rollback tax rate has been 8% higher than the maintenance and operations effective tax rate; however, recent legislation lowered this rate to 3.5%, effective in fiscal year 2020-21.





Senate Bill 2 explained


Texas Gov. Greg Abbott signed Senate Bill 2 into law June 12.

The new law restricts a city or county’s ability to raise its property tax rate more than 3.5% without voter approval.

Prior to SB 2, taxing entities could increase property tax rates up to 8% higher than the maintenance and operations effective tax rate without the need for calling an election.

SB 2 and its tax rate cap will go into effect in fiscal year 2020-21.





Benchmarking area tax rates


Cities across the Austin metro area vary in property tax rates. Georgetown boasts one of the lowest local rates, and Hutto levies one of the highest in the area.


By Marisa Charpentier

Reporter, Cedar Park | Leander

Marisa Charpentier joined Community Impact in September 2018. After working as an intern, she became a reporter for the Cedar Park | Leander edition in October 2018. Charpentier graduated from The University of Texas at Austin with degrees in journalism and Plan II Honors.



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