Council Discusses Impact of Senate Bill 2 on Addison's Fiscal Year 2021 Tax Rate

At the June 23 Council Meeting, CFO Steven Glickman gave Council an update on Senate Bill 2 (SB 2) and its impact on Addison's Fiscal Year 2021 tax rate. SB 2 is also known as the Texas Property Tax Reform and Transparency Act of 2019 and was passed by the Texas Legislature in 2019. This bill is effective for tax rates adopted after January 1, 2020, and lowers the tax increase a taxing unit can adopt without requiring voter approval from 8% to 3.5%. If a city chooses to exceed the Voter Approval Tax Rate of 3.5%, that decision triggers a mandatory election to vote on the tax increase.

SB 2 also includes a disaster exemption that allows cities to calculate the Voter Approval Tax Rate at 8% instead of 3.5%. Since President Trump declared a national emergency and Governor Abbott declared a state of emergency due to COVID-19, these actions triggered the disaster exemption in SB 2. This allows a City Council to direct the designated officer or employee to calculate the Voter Approval Tax Rate at 8% instead of 3.5%. 

At its July 14 meeting, Council directed the City Manager to calculate the Fiscal Year 2021 voter approval tax rate at 8% rather than 3.5% due to the Governor's statewide disaster declaration. This resolution is not intended to and does not obligate the Council to adopt a voter-approval tax rate in excess of 3.5%. Per Addison's charter, the City Manager must submit his budget to Council by midnight on July 31. Council has budget meetings scheduled for early August to discuss the proposed budget and the community will have public input opportunities in August and September, prior to the adoption of the final budget.

You can watch the Council's SB 2 discussion here and read the presentation here.