Proposed Tax Rate
See the Notice of Proposed Tax Rate
City Council has voted to consider a tax rate of 33.2 cents per $100 value for this year to fund the fiscal year 2020 budget.
Combined with the increase to the homestead exemption that was approved in June, the average homeowner will see only a $24 increase to their City tax bill in 2019. The increase to the homestead exemption allows targeted tax savings to homeowners while re-balancing the residential to commercial value ratio of the City's tax base.
Residential Tax Bill Impact
|Average Home Value||$ 375,201||$375,289||0.02%|
|Taxable Value||$ 337,681||$330,255||-2.2%|
|City Tax Bill||$1,072||$1,096||$24 or 2.2%|
Truth in Taxation Calculations
The proposed 2019 tax rate is a 3.99% increase compared to the effective tax rate calculated under the truth in taxation formula prescribed by the state. The figures presented in the Notice of Proposed Tax Rate are shown below:
|Proposed Tax Rate||$0.33200 per $100||Proposed tax rate for this year|
|Preceding Year's Tax Rate||$0.31762 per $100||2018 adopted tax rate|
|Effective Tax Rate||$0.31925 per $100||Tax rate that generates the same revenue as 2018 tax rate|
|Rollback Tax Rate||$0.33617 per $100||Allows for an 8% increase for maintenance & operations funding|
Low Property Tax Rate
Compared to similarly sized cities throughout the state, including those in our region, we are proud to have one of the lowest tax rates in the state while still providing the high level of services our citizens expect. In fact, the average household cost of services has remained low, even as the services and amenities provided by our lean but championship workforce daily have increased.
Sugar Land has lowered its property tax rate over 18 cents since 1993 and has maintained the second lowest tax rate in the State among cities our size – with the City's tax bill making up only 15% of the average residential tax bill.
Sugar Land collects one of the lowest amounts in residential property taxes on a per capita basis – not only in the Houston region but also across the state – based on a comparison of peer cities.
City Council Increases Homestead Exemption to 12%
In June 2019, the City Council voted to increase the residential homestead exemption from 10% to 12% for the 2019 tax year. This means that raising the tax rate to support the 2013 park bond project completion will have minimal impact on residential tax bills, as the increase in the homestead exemption will offset most of the tax rate increase.
This residential homestead exemption increase, while not shown on the 2019 appraisal notices sent by the Fort Bend Central Appraisal District, will be applied to the 2019 tax bills mailed in October, providing immediate impacts to homeowners on their tax bill while allowing commercial properties to support funding for City programs and services, including funding for the remaining 2013 voter authorized park bonds.
Tax Rate Adoption Process
The property tax rate is adopted in September after the budget is approved by City Council. Prior to adoption there is a series of public notices and public hearings on the proposed rate.
Property values in Fort Bend County are set by the Fort Bend Central Appraisal District (CAD). The CAD is charged with establishing values for all properties in the County as of January 1 of each year and certifying the taxable values to each taxing entity. Under the Tax Code, the value must be certified by July 25 of each year. However, 95% of property in the county must be approved before the Chief Appraiser can certify the values.
Since the City Charter requires the City Manager to file a proposed budget no later than July 30 of each year, the budget is based on assumptions of property tax revenues. The tax rate needed to generate the revenue in the FY20 budget and CIP is dependent on the final certified taxable value.
Truth in Taxation
Once the City receives the certified value reports from the CAD, the process of setting a tax rate for the year begins. The City has 60 days after receiving the certified tax roll or until September 30th (whichever is later) to adopt a tax rate. However, there are strict time constraints and processes that must occur in order to adopt the tax rate.
The Effective Tax Rate is the tax rate that generates no additional revenue for the City and is referred to as the "no new taxes rate". New values to the tax roll are excluded from this calculation.
The Rollback Rate is the tax rate that generates the revenue needed to meet the City's debt service obligations, plus 8% increase in revenue for operations and maintenance. If a tax rate is adopted that exceeds the rollback rate, voters may petition for an election to reduce the tax rate to the rollback rate.
Please note: changes to property taxes from Senate Bill 2 are effective for tax year 2020 and do not impact the 2019 tax rate which is in the process of adoption.