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RESOLUTION NO. R2015 -010
A RESOLUTION OF THE CITY OF DENTON, TEXAS, IN OPPOSITION TO A REVENUE
CAP AND LEGISLATIVE INTERFERENCE WITH LOCAL SERVICES; AND PROVIDING
FOR AN EFFECTIVE DATE.
WHEREAS, bills have been introduced to cap the amount of property tax revenue cities
can collect each year in a misguided effort to reduce the property tax burden on homeowners and
businesses; and
WHEREAS, currently, if a Texas city increases property tax collections by more than
eight percent over the previous year, voters can petition for an election to rollback the increase;
and
WHEREAS, bills have been introduced to replace that eight percent "rollback rate" with
a hard cap of four percent and require mandatory elections on an increase over four percent — all
with the false claim that this would provide property tax relief, and
WHEREAS, according to the state comptroller's latest survey of property tax rates in
1,002 cities in Texas, 67 percent of cities raised their property taxes by less than four percent
from 2012 to 2013 and 37 percent of cities actually reduced their property taxes; and
WHEREAS, that means property owners in at least 669 Texas cities would have seen no
reduction in their city property taxes if the four percent cap had been in effect; and
WHEREAS, while the savings to individual taxpayers in Denton for FY 2014 -15 would
only represent $2.14 per month, it would cost the City of Denton $1.2 million if a four percent
cap were in place resulting in a loss of vital city services; and
WHEREAS, if this calculation were computed for the previous ten years, the cumulative
impact would have been a loss of $48 million to the City of Denton; and
WHEREAS, this legislation will force local governments to defer critical maintenance
expenses for infrastructure assets such as facilities and streets, which will decline more quickly,
needing to be replaced when they completely deteriorate; and
WHEREAS, property taxes will not be reduced through revenue caps. Instead, costs, and
the property taxes that pay for them, will be shifted to support additional debt that will have to be
issued to rebuild this infrastructure. Shifting taxes to pay debt is not a tax cut and will cost
taxpayers more in the future since communities will now be required to pay the interest on these
costs, as well; and
WHEREAS, in addition to the interest costs, taxpayers will have to pay exponentially
higher costs associated with rebuilding our streets and other infrastructure. In other words,
deferring maintenance expenses will cost our taxpayers much more in the future; and
s: \legal \our documents \resolutions \15\rev cap resolution (2).docx
WHEREAS, the Texas Miracle has relied on local governments' use of economic
development incentives. Revenue caps will only serve to eradicate the use of incentives driving
away the job growth and businesses that have made Texas the economic development leader in
the nation; and
WHEREAS, cities collect just 16 percent of the property taxes levied in Texas, and most
of the property taxes paid by Texans (55 percent) go to school districts, which are inadequately
funded by the State; and
WHEREAS, according to the comptroller's report, the total amount of property taxes
collected by cities rose by 3.61 percent between 2012 and 2013, while school district tax
collections rose by more than twice that rate or 7.72 percent; and
WHEREAS, school property taxes have been rising, because the legislature continues to
reduce the state's share of funding for schools, which forces districts to get more revenue from
property taxes; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION 1. The findings set forth in the preamble of this Resolution are incorporated
by reference into the body of this Resolution as if fully set forth herein.
SECTION 2. The City Council of the City of Denton, Texas, is OPPOSED to the
legislative imposition of a revenue cap and legislative interference with local services.
SECTION 3. Imposing a revenue cap on cities: (a) does not provide meaningful tax
relief; (b) robs cities of the ability to meet local needs; and (c) diverts attention from the real
cause of higher property taxes, which is the legislature's failure to address the problem of school
funding.
SECTION 4. This Resolution shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the 3 day of ����A, & .:...... 12015.
�. . .�......
`l Ia WATTS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
It
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I s:\Iegal\our documents\resolutions\l 5\rev cap resolution (2).docx
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
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