DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT: Briefing on Request for Consideration of a General Homestead Exemption and increase to the Existing Over-65 and Disabled Tax Exemption
SUMMARY:
This is a briefing on the Council Consideration Request (CCR) from Councilmembers Courage and Perry for consideration of a General Homestead Tax Exemption and increasing the Over-65 and Disabled tax exemptions.
BACKGROUND INFORMATION:
On February 20, 2019, Councilmembers Courage and Perry submitted a Council Consideration Request for consideration of a general homestead tax exemption and increasing the over-65 and disabled tax exemptions.
The City currently offers a $65,000 Over-65 and $12,500 Disabled persons tax exemption along with a tax freeze that was adopted in FY 2005.
Tax Code Section 11.13(n) allows any taxing unit the option to offer a residence homestead exemption of up to 20 percent of a property's appraised value. If the percentage set by the taxing unit produces an exemption of less than $5,000, the property owner is entitled to an exemption of $5,000 of the appraised value. Application of the exemption must be adopted before July 1 to be effective for FY 2020.
In the current State legislative session, SB 2 and HB 2 have been filed which propose to lower the current property tax rollback rate from 8% to 2.5%. SB 2 was voted out of the Senate Committee on Property Tax with the rollback rate at 2.5% and is on the Intent calendar but has not been voted on by the full Senate. HB 2 has been heard in the House Committee on Ways and Means but has not been voted out of Committee. City staff has analyzed a 2.5% property tax rollback rate and the impact to the City budget would be substantial. If a 2.5% rollback rate had been in place for the past decade, the property tax revenue loss to the City would have been approximately $304 million cumulatively and the amount of property taxes in the General Fund would...
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