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Saturday, August 8, 2009

Just a reminder: Your tax rate will increase


The Dallas city manager's proposed budget and the Dallas city council is making a big deal about not raising the property tax rate, even though projections showed that potential revenue for the upcoming year was, at one point, $190 million less that projected expenses. So, to make ends meet, the city cut expenses without demanding a revenue increase in the form of a property tax rate (although many fees are being increased, which, if all goes according to plan -- and it never does -- are designed to bring in additional revenue.)

What we're talking about here is something called the General Fund, which actually comprises less than half of the city's entire budget. The General Fund ($1.016 billion out of the total city budget of $2.720 billion) pays for the operations of all the city's services except Aviation, Convention & Event Services, Municipal Radio, Storm Water Management, Water Utilities and, for the most part, Sanitation Services. Those services are paid for from funds they each collect from separate billings (i.e., the money to operate Water, Storm Water and Sanitation comes from the money residents pay each month in their water bill; Municipal Radio gets income from advertising sales; Convention & Event Services from the conventions booked; Aviation from landing fees and leasing property at the three airports operated by the city, etc.).

But there is another part of the city's budget known as the Capital Budget. This is what funds the major construction projects. They are financed through the sale of bonds and in 2006 voters approved the largest bond sale in the city's history. That approval meant that, to pay for those bonds, the property tax rate would increase during the five ensuing years after the vote.

So when you hear your property tax rate is not going to increase because of this budget, that is technically true. But your tax rate will increase this year because of the passage of 2006 bond package.

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