Background

The City has a long history of recognition as a leader in financial stewardship, with strategies specifically tailored to the community and designed to maximize both the conservative nature of the City’s finances and to offset the residential tax burden.

In anticipation of high growth in property values, in June 2023 the City Council approved a 2% increase to the residential homestead exemption- for a total exemption of 15%, to be effective for the 2023 tax year.

The Fiscal Year 2024 proposed budget and five-year Capital Improvement Program (CIP) were presented to the City Council on July 18, 2023, in accordance with the City Charter.  The budget ensures continued financial strength and resiliency by meeting all fund balance requirements, including the structural balance of the General Fund, and includes significant investment in public safety, infrastructure, and Sugar Land’s high quality of life.  The City continues to be recognized as a leader in financial stewardship, with strategies specifically tailored to the community and designed to maximize both the conservative nature of the City’s finances and to offset the residential tax burden.

The FY24 budget provides leadership in conservative, resilient & responsible stewardship through strategic investment in priority areas. The focus of the proposed budget is an investment in priorities and services that provide high value to the Sugar Land community today and into the future, including public safety, redevelopment, data-based decision making, and a championship workforce.

The budget was reviewed with City Council through a series of workshops, along with a public hearing on the budget on August 15, 2023. City Council proposed the tax rate of $0.350000 per $100 AV, and a public hearing on the proposed tax rate was held on September 12, 2023.

Truth In Taxation Calculations

The Fort Bend Central Appraisal District (FBCAD) is charged with assessing property values within Fort Bend County. The City of Sugar Land contracts with the Fort Bend County Tax Office (a separate entity from FBCAD) for Tax Assessor/Collector services, including calculation of tax rates as directed by the Tax Code.  Based on calculations performed by the Tax Assessor/Collector, the required rates have been calculated and submitted to the governing body as follows:

• Proposed Tax Rate                  $0.350000 
• No New Revenue Tax Rate:    $0.340667
• Voter Approval Tax Rate:        $0.364512

Record Vote on Proposed Tax Rate

At the August 15th City Council meeting, City Council voted to consider a tax rate of $0.350000 and hold a public hearing on the proposed tax rate on September 12th. The proposed tax rate results in an increase to the average residential tax bill of $108.23 per year or $9.02 per month.

Public Hearing

On September 12, 2023 a public hearing was held to hear all taxpayers wishing to speak on the proposed tax rate.  No action was taken at the public hearing.

At the end of the public hearing, the date, time, and place for action on the tax rate was announced.

Recommendation

After discussion with City Council, staff recommends adoption of a tax rate of  $0.350000 per $100 for 2023.  The tax rate is adopted in two parts, one for Maintenance & Operations, and one for Debt Service. Ordinance No. 2317 reflects the recommended allocation for the 2023 tax rate.

The distribution of the tax rate is shown below:

• Maintenance & Operations                $0.203962
• Debt Service                                      $0.146038
• Total 2023 Tax Rate                           $0.350000

REQUIRED LANGUAGE

This year's proposed tax rate exceeds the no-new-revenue tax rate. The vote on the ordinance, resolution, or order setting the tax rate must be a record vote and 60% of the governing body must vote in favor of the adoption of the tax rate.

A motion to adopt the ordinance must be made in the following form:

“I move that the property tax rate be increased by the adoption of a tax rate of $0.350000, which is effectively a 2.74 percent increase in the tax rate.”