This week the Grapevine City Council discussed reducing the property tax rate by 1.25 cents.
Last week the council asked city staff to look into lowering the city’s current rate of 36.25 cents per $100 in assessed value by 1/4-cent to 36 cents. The new proposal would lower the tax to the effective rate of 35 cents per $100 of assessed value. The effective tax rate is the rate that the city would need to set to bring in the same level of revenue in the new budget year as it did in the prior fiscal year.
The city has maintained the tax rate in recent years, but the actual amount of taxes owners pay have continued to increase because of rising property values.
Mayor William D. Tate said the council needs to make a meaningful cut in the property tax rate because the economy is sluggish, fuel prices are higher than last year and some residents are struggling.
"Keep in mind that there is a $900,000 bump [in taxes from increased valuations], and there is a $2 million surplus in sales tax," Tate said.
The taxable value of the average house in Grapevine, according to the Tarrant Appraisal District, is $169,616. The proposed property tax decrease would save the homeowner $21 per year compared with last year’s rate.
Chris Coy pointed out that property tax bills in Grapevine have increased 11 percent when looking at both commercial and residential property.
However, officials have expressed concern that the city is becoming too dependent on sales tax. About one-third of the city’s total revenue is from sales and use taxes.
In the proposed $160 million fiscal budget, which begins Oct. 1, the council is considering giving the employees raises and waiting until later in the year to spend money on projects that are not immediately needed,officials said.
City Manager Bruno Rumbelow has proposed giving all city employees a 4 percent market adjustment in salaries. He has also proposed a 3 percent merit increase for most city employees, and a 5 percent step increase for police and fire personnel.
The council will have another budget workshop at 5:30 p.m. Monday, Aug. 18. A public hearing is planned for Aug. 26. The Council could vote on the budget on Sept. 16.