Title
Consider and act on a proposed ad valorem tax rate for Fiscal Year 2025-26 and call a public hearing for August 18, 2025, on the proposed Fiscal Year 2025-26 ad valorem tax rate.
Body
State law requires publishing special notices and conducting a public hearing before adoption of a tax rate if the tax rate exceeds the no-new-revenue tax rate. The no-new-revenue tax rate is defined as the tax rate that would produce the same amount of property tax revenue as last year based on the value of the same properties listed on the tax rolls. The City’s estimated no-new-revenue tax rate is $0.643409 per $100.00 of assessed valuation. Staff recommends that the proposed tax rate not exceed $0.720000 per $100.00 of assessed valuation, which is greater than the estimated voter-approval tax rate of $0.653739 per $100.00 of assessed valuation. Actual no-new-revenue and voter-approval tax rates based on the certified tax roll will be calculated by the Dallas County Tax Office and will be submitted to the City on August 1, 2025.
The tax rate approved at this meeting will be published in the notice of the called public hearing on August 18, 2025, along with a record vote, and effectively sets a ceiling for the tax rate that will be adopted after the public hearing. Following the public hearing, the Council may choose to adopt the tax rate set today, or a lower rate, but the adopted rate cannot exceed the tax rate approved at this meeting.
State law also requires at least 60 percent of the members of the governing body to vote in favor of an ordinance setting a property tax rate that exceeds the no-new-revenue tax rate. Therefore, at least five members (60 percent) of the City Council will need to vote in favor of setting a tax rate higher than the no-new-revenue tax rate. If the required 60 percent majority vote cannot be reached in setting the tax rate, then by State law, the City’s tax rate for Fiscal Year 2025-26 will be set at the no-new-revenue tax rate, currently estimated at $0.643409, which would require a $2,234,983 reduction in proposed expenditures or draw on the fund balance for the General Fund.
To adopt the tax rate at the August 18, 2025, City Council meeting, staff recommends the following proposed calendar of action items.
PROPOSED CALENDAR FOR TAX RATE ADOPTION
August 4, 2025 Set Proposed Tax Rate and Call Public Hearing on Tax Increase
August 7, 2025 Publish Notice of Public Hearing on Tax Increase
August 18, 2025 Hold Public Hearing to Discuss Proposed Tax Rate and Adopt Tax Rate
Recommended/Desired Action
Staff recommends the City Council set a proposed ad valorem tax rate for Fiscal Year 2025-26 and call a public hearing for August 18, 2025, on the proposed Fiscal Year 2025-26 ad valorem tax rate.
A motion must be read at the August 4, 2025, City Council meeting as follows; “I move that, upon proper notice and final adoption after the public hearing is held, property taxes be increased by the adoption of a tax rate for Fiscal Year 2025-26 not to exceed $0.____ per $100 of valuation. The public hearing to consider this rate will be held on August 18, 2025, at 7:00 p.m. in the Council Chamber at City Hall, 757 North Galloway Avenue, Mesquite, Texas.”
Drafter
Ted Chinn
Head of Department
Ted Chinn