Item 6E - MemoItem 6E
CITY OF MEMORANDUM
SOUTHLAKE August 11, 2025
To: Alison Ortowski, City Manager
From: Sharen Jackson, Chief Financial Officer
Subject: Hold a public hearing to consider a proposal to adopt a tax
increase
Action
Requested:
Background
Information:
City Council's consideration of a proposal to adopt a tax rate
above the no new revenue rate.
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 ($0.274049) 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.
NOTE: On August 7, 2025, Tarrant Appraisal District provided
updated information due to an error on July 25t", certified
Truth -in -Taxation material provided to taxing entities. After
updating the tax rate calculations, the no -new -revenue tax
rate changed from ($0.273677) to ($0.274049).
Rate
Tax Rate
Average
Options
Tax Rate
Reduction
Reduction-
Valued
from
Revenue
Home
Current Tax
Impact
Tax Bill
Rate
FY 2026
No -new-
$0.274049
$0.030951
($3,626,852)
$2,510
revenue
Reduced
$0.295
$0.01
($1,363,624)
$2,702
Tax Rate
Honorable Mayor and City Council
Page 2 of 2
Financial
Considerations: The no -new -revenue tax rate would result in a property tax
revenue reduction for FY 2026 of $3,626,852.
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 on August 19t", September 2nd, and
September 19t", with the adoption of the tax rate.
Legal Review: None required
Alternatives: None
Supporting
Documents: None
Staff
Recommendation: A tax rate above the no -new -revenue tax rate.