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Property value increased; sales tax to remain level
Stephanie Flemmons
Staff Writer
Residential and commercial property owners will see a change in their property taxes due to valuation jumping to an all-time high for fiscal year 2007-2008 beginning Oct. 1.
Muehlenbeck said the tax rate of 47.35 cents per $100 of assessed valuation will remain the same. He added of this rate, 2 cents will continue to be dedicated solely for the Economic Development Incentive Program.
“This will continue to entice commercial entities to Plano and provide economic development programs and redevelopment in order to expand our revenue base,” Muehlenbeck said.
According to Karen Rhodes, Plano’s budget director, the average single family home value increased from $244,000 last year to $253,380. She said the city has not seen such an increase since 2002.
Jimmie Honea, chief appraiser for Collin County’s Central Appraisal District, said the total assessed property value for 2007-2008 equals $24.5 billion and includes $568.1 million of new property coming on-line.
“What’s not really apparent for the Central Appraisal District is how much total loss in revenue the city faces through tax exemptions and tax freezes, Rhodes said.”
Plano faced $4.84 billion in total exemptions, which Rhodes said translates into $22.9 million in lost property tax revenue each year.
Casey Srader, Plano’s budget manager, said the exemptions are necessary to create an incentive to be a homeowner in Plano.
The General Homestead Exemption takes an automatic 20 percent off the total appraised value of the house. The Over 65 exemption and the Disabled Person Exemption both take $40K off the top.
The Over 65 Tax Freeze equals a loss of $543,383, which doubled compared to last year.
This incentive allows residents who turn 65 to pay the same amount of property tax the year they turn 65 for the rest of their life. Srader said if the resident moves to another house then that incentive will go away.
“This benefits the over 65 because most of the time their income becomes stagnate,” Srader said. “As Plano matures, this number will continue to increase.”
Rhodes said property tax is Plano’s largest revenue source, but the city also relies heavily on sales tax.
According to Muehlenbeck’s recommended budget, the city has experienced significant sales tax growth primarily due to greater-than-anticipated sales activity in the commercial and industrial sectors.
But, Muehlenbeck said after results from a recent sales tax audit, the city will be required to pay back $1.9 million due to two different taxpayer adjustments.
“We will get a report to determine who those companies are that created such a sizeable adjustment decline, but won’t be able to reveal the information,” Rhodes said.
The FY 2006-2007 re-estimated budget figured a total sales tax revenue of $61.2. Muhlenbeck said he wanted to be overly cautious in projecting FY 2007-08 sales tax revenue and will remain flat at $61.2 million.
“All of the surrounding communities and retail competition has also caused the city to remain flat for next year’s projections,” Srader said. “Plano is at the point where all of our retail is where it is going to be. We are not in a growth mode like some of the surrounding cities.”
Srader said projected inflation and economic factors play into the conservative projection as well.
Stewart Wysong, General Manager of the Collin Creek Mall, said retail took a hit four years ago when a lot of competition came to the area.
“Our sales have been stable since the competition and expect them to stay stable for 2008,” Wysong said. “We are projecting an increase for 2009.”
Out of the 8.25 percent sales tax rate, 1 percent goes to the city, 1 percent goes to Dallas Area Rapid Transit (DART) and the other 6.25 percent goes to the state.
Srader said surrounding city’s like Frisco, who don’t contribute to DART, voted to have one percent of their sales tax go to an Economic Development Program, like Plano did for the 2 cents of their property tax revenue.
“This is why council decided to add on the two cents to our property tax,” Srader said. “They wanted to offset the competition.”
Muehlenbeck said the council will discuss the sales tax further in a meeting Aug. 18.
Contact Stephanie Flemmons at sflmmons@acnpapers.com
The following are comments from the readers.
In no way do they represent the view of Starlocalnews.com
In no way do they represent the view of Starlocalnews.com
Dave wrote on Aug 7, 2007 12:00 PM:
" Raise property taxes? Have you tried selling a home at the 'Market Value'? It's impossible. "
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