Government
BY JENNA STEPHENSON
As budget season begins, Plano o cials are considering the city’s long-term nancial health in their assessment of possible property tax rate increases. Director of Budget and Research Karen Rhodes-Whitley gave a presentation on Plano’s ve-year nancial forecast alongside consultants from NewGen Strategies and Solutions at a March 23 Plano City Council meeting. What you need to know On top of expected in ation, new expenses related to sta ng and operating a number of facil- ities being built in the next ve years will require increased spending from the city’s general fund, Rhodes-Whitley said. This budget season, council members will consider whether to increase property tax rates to meet those additional spending needs. Council can raise property taxes by as much as 3.5% without calling an election, NewGen rep- resentatives Matthew Garrett and Steve Doogue said. Council could also choose to maintain a at property tax rate, called the no-new-revenue rate. If council decides to go with the no-new-rev- enue rate, expenses are expected to outpace revenue and deplete fund balances, according to the presentation. In order to increase revenue for expected spending increases, the city will rely on adjusting property tax rates, Garrett and Doogue said. Plano o cials to consider property tax increase
The total market value of property in Plano is expected to grow an average of 3.3% per year over the next ve years, the representatives said. However, city o cials can only collect property tax on a limited portion of that value. Breaking it down Plano’s spending from its general fund is expected to increase by an average of 3.2% each year, partially due to projected in ation. Garrett and Doogue said the cost of water, gas, and health bene ts could all increase faster than general in ation. Council also plans to spend more on speci c items like public safety compared to previous years. Fire Station No. 8 is set to undergo renovations in 2027, and Fire Station No. 14 is expected to come online in fall 2028, increasing the operating expenses of the new stations. Plano Fire-Rescue is also switching to a new sta ng schedule over the next ve years. As part of the new schedule, the department will hire 120 new re ghters by 2030, increasing spending by over $20 million by FY 2030-31. The city of Plano generates most of its general fund revenue through property and sales tax, which is split into two categories. The mainte- nance and operations rate, which is used for daily operations, and the interest and sinking rate, which is used to pay bond debts. Plano residents already pay an 8.25% sales tax, which is the maximum allowed under state law. Looking ahead It’s likely that council will land somewhere in the middle of the no-new-revenue rate and the voter-approval rate each year, Rhodes-Whitley said. Council will adopt the budget before the next scal year, which starts Oct. 1.
Projected general fund revenues, FY 2025 26
Property tax: 44.16% $192.5B
Sales tax: 30.58% $133.3M
Total: $435.9M
Other: 25.26% $110.1M
SOURCE: CITY OF PLANO COMMUNITY IMPACT
Plano's tax rate from scal year 2020 25
Maintenance and operations rate Interest and sinking rate
2020-21
$0.3372 $0.1110
2021-22
$0.3330 $0.1150
2022-23
$0.3026 $0.1150
2023-24
$0.3026 $0.1150
2025-26
$0.3026
$0.1150
SOURCE: CITY OF PLANO COMMUNITY IMPACT
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