The city of Fulshear held its first required public hearing on the maximum proposed tax rate at its Aug. 20 city council meeting. Although the public hearing was based on the maximum amount of $0.21897 per $100 of valuation, it is not necessarily the rate that will be adopted. City staff proposed a tax rate of $0.19251, and Fulshear Mayor Aaron Groff said the final number will likely fall somewhere between $0.19251 and $0.21897. In fiscal year 2018-19, the city had a total property tax rate of $0.16251. Funds collected from this tax were only for a maintenance and operations fund. The proposed FY 2019-20 M&O rate is $0.138462. For FY 2019-20, city staff also proposed creating an interest and sinking tax fund at a rate of $0.054048. These funds would help the city pay debt that finances the city's facilities. Before 2019, Fulshear could only implement an M&O tax rate and not an I&S tax rate due to previous agreements with developers and municipal utility districts, which are special governmental entities that can levy property taxes to provide water, sewage, drainage and other services within its boundaries, according to real estate consultant Julie Lehrer. Together, the proposed M&O and I&S rates would total $0.19251 per $100 valuation—an increase from the FY 2018-19 total rate from $0.16251. Many residents said they were not in favor of increasing their property tax rates. “We’re all one,” resident Jackie Gilmore said during the public hearing. “We want to understand the reason for the tax rate. Some of us are paying a lot of taxes right now and the last thing we need is our rates to go up.”

Tax restructuring

Groff agreed the proposed FY 2019-20 tax rate looks different compared to the FY 2018-19 rate. "This tax rate looks different, but nothing has changed as far as the pot," he said. "All of the monies, all of the revenues, whether it's from tax rates, sales tax, utility fund, permit fees or any of those other items, all of those go into the general fund. And so all that is happened is a change in the way we’re able to collect that tax." He added the city has been paying a rebate to MUDs to help pay for infrastructure costs. Under the new agreements, the city will now pay an annual fee that is more or less equal to the rebate. "One of the things that I want to make sure everyone understands is that the new agreements changed the rebate structure from a rebate to an annual payment," Groff said. "But it was always being paid from the same bucket of money: the general fund." Additionally, beginning Oct. 1, Groff said city of Fulshear residents will see a reduced wastewater rate of $15 due to the new agreements with the MUDs. The council must hold a second hearing, which is scheduled for Sept. 10, before voting to implement the tax rate.