Property Taxes

As a leader in financial stewardship across the state and nation, the City has intentionally focused on the development of resiliency initiatives and innovative constraint in response to the uncertainty of the regional economy in recent years. These efforts are a major part of how the City is able to maintain the second lowest tax rate in the State of Texas among cities of our size. Accomplishments include:

• Sugar Land has lowered its property tax rate over 18 cents since 1993 and now boasts the second lowest tax rate in the State among cities of our size.
• Over the last 15 years, the average value home has increased by about 5% annually, while the average tax bill has only increased by about 3% annually over the same time period.
• The City of Sugar Land makes up only 15% of the average residential tax bill.

The adoption of the City’s property tax rate is governed by Chapter 26 of the Tax Code. This chapter sets strict timelines and processes that must be followed each year by the City to set the annual tax rate and levy the property taxes- which are a substantial portion of the City’s revenue stream each year.

On July 25th, the City received the Certified Tax Roll for 2018. The tax roll shows Net Assessed Valuation of $16.099 billion to the City, taking into account 95% of the value under review ($269 million) at the time of certification.

Based on the certified taxable values and other reports received, the Fort Bend County Tax Office has calculated the City’s effective tax rate for 2018, which is the tax rate that generates the same amount of revenue for FY19 as was generated in FY18 based on the properties that were taxed in both years. The effective tax rate for 2018 is $0.30948.

As recommended by the City Manager, the proposed FY19 budget and CIP can be funded with a flat tax rate of $0.31762, which is 2.63% above the effective tax rate.

With that said, the City Council is considering up to a one-cent increase to fund the remaining projects from the 2013 voter approved GO bonds for parks. As such, on August 9th, the City Council directed staff to publish a notice of proposed tax rate of $0.32762 for 2018, which is a one cent increase from to the 2017 tax rate, and the City Council would like to receive input from residents regarding the proposal. Should City Council move forward with the one-cent increase – which would still be the second lowest tax rate in the State of Texas among cities our size, staff will evaluate the possibility a one percent increase to the homestead exemption in the spring of 2019.

The attached notice of proposed 2018 tax rate was published on August 15, 2018 in the City's newspaper of record, at least 7 days prior to the first public hearing, as required by Local Government Code 140.010.

Budget and Tax Rate Process

The City has extensively utilized social media and the website to help educate residents about the proposed budget. Since the City's budget is essentially our residents' budget, it is targeted to address priorities identified by residents. We invite them to become involved and will continue to do so throughout the budget and tax rate setting process.

Additionally, extra efforts have been made to provide information to the City Council as early as possible, including written documentation of questions and requests for additional information received from City Council Members, along with the answers several times per week to facilitate the flow of information.

Under the Tax Code, two public hearings on the proposed tax rate are required – the first was held on August 28 and the second is on September 4, and the City Council may not take action at either public hearing. The tax rate must be adopted between 3 and 14 days after the second public hearing and the Council must vote to place an item on the agenda to adopt the tax rate. 

The budget and tax rate are scheduled for approval on September 18, 2018.