Item 9A - MemoM E M O R A N D U M
July 28, 2025
To: Alison Ortowski, City Manager
From: Sharen Jackson, Chief Financial Officer
Subject: Consider proposal to adopt a tax increase and set a public
hearing on the tax rate for August 19, 2025
Action
Requested: City Council’s direction regarding the FY 2026 tax rate prior to
the city manager filing the budget on August 15th.
Background
Information: Recall the current tax is $0.305, which equates to an annual
tax bill of $2,793 for an average valued home in Southlake.
State statute requires a taxing unit to calculate two rates after
receiving the certified appraisal tax roll: the no-new-revenue
tax rate ($0.273677) and the voter-approval tax rate
($0.299414). The voter-approval rate adjusted for the unused
increment tax rate is ($0.364506). The unused increment tax
rate is a component under the Tax Code. It represents the
portion of the allowable voter-approval rate that a taxing entity
did not levy, which it may “bank” for up to three years to apply
toward future tax increases. The no-new- revenue rate is the
rate that will generate the same amount of property tax dollars
as the previous year when the two years are compared,
excluding new construction. If a city adopts a tax rate
exceeding the no-new-revenue rate, to comply with truth-in-
taxation laws the governing body must vote to place a
proposal to adopt the rate at a future meeting as an action
item and hold a public hearing.
Options Tax Rate
Rate
Reduction
from
Current Tax
Rate
Tax Rate
Reduction-
Revenue
Impact
FY 2026
Average
Valued
Home
Tax Bill
No-new-
revenue
$0.273677 $0.031323 ($4,271,279) $2,506
Reduced
Tax Rate
$0.295 $0.01 ($1,363,624) $2,702
Financial
Considerations: The no-new-revenue tax rate would result in a property tax
revenue reduction for FY 2026 of $4,271,279.
Item 9A
Honorable Mayor and City Council
Page 2 of 2
Strategic Link: F1 Safeguarding the public trust through a commitment to
thoughtful planning and responsible, conservative financial
management.
Citizen Input/
Board Review: A public hearing would be scheduled for August 19th
Legal Review: None required
Alternatives: None
Supporting
Documents: None
Staff
Recommendation: Place a proposal to adopt a tax rate increase and set a public
hearing for the August 19th Regular City Council meeting.