Government
BY DUSTIN BUTLER
City manager: new state laws limit city operations, budget
More than 2,000 bills coming out of Texas’ 89th legislative session will have an impact on city operations and budgets, City Manager Don Magner said. The bills are expected to create a “challenging” budget season, Magner said, because they will affect the city’s revenue sources. Richardson Police Chief Gary Tittle gave an overview of several bills city staff tracked through the session during the June 23 council meeting. The legislation Senate Bill 924 disallows cities from charging franchise fees for streaming services, such as Netflix and Hulu, as they can for cable services. Magner said the expected impact is about $450,000 of revenue loss. House Bill 9 changes the exemption for Business Personal Property taxes from $2,500 to $125,000. The budget impact is expected to be about $1.5 million, Tittle said. For the bill to go into effect, voters must approve it as an amendment to the Texas Constitution during the November election. It would go into effect Jan. 1, 2026. “This is something we’re going to have to be mindful of during this budget cycle,” Magner said. Tittle said city staff supported House Bill 500, which allows unused balances from the Texas Semiconductor Innovation Fund to be used for programs within the Texas Semiconductor Innova- tion Fund Consortium. What else Other bills will affect the budget in less direct ways, Magner said. Senate Bill 1567 restricts cities with universities from limiting the unrelated
occupants that can reside in a property. “Things like that are going to generate more complaints,” Magner said. “They’re going to necessitate more staffing to investigate those complaints.” House Bill 1522 will impact operations by requiring cities to post City Council agendas three business days before the meeting. Currently, cities must post the agenda 72 hours before the meeting. Under the new law, Magner said the agenda must be posted by Tuesday for the following Monday’s meeting. Once an agenda has been posted, it cannot be changed, and cities are not allowed to include general language that would permit last-minute additions, Magner said. Looking ahead During the first called session of the 89th Leg- islative Session, State Senator Paul Bettencourt, R-Houston, filed Senate Bill 9, which would cap property tax revenues for cities and counties with populations of 75,000 at 2.5%. Currently, property tax revenue growth is capped at 3.5%. Bettencourt refiled the bill, now as Senate Bill 10, in the second called session. During an Aug. 4 Richardson City Council bud- get workshop, City Manager Don Magner said if SB 9 becomes law, property tax collections would be reduced by about $750,000. Magner said Aug. 4 that about 42%, nearly $77 million, of the fiscal year 2025-26 budget comes from property taxes. “The city opposes any measure that com- promises its ability to responsibly manage the resources entrusted to it by Richardson residents and businesses,” Magner said in an email.
Other impacts from the state Several additional bills passed during the Texas legislative session will affect Richardson and surrounding cities.
House Bill 30 Allows incorporation of a disaster debris rate when calculating their voter-approval tax rate Senate Bill 15 Caps minimum lot size for small lots. Also disallows ordinances requiring a lot size larger than 300 square feet. Senate Bill 1851 Establishes an annual financial audit and property tax rates cannot be higher than the no-new revenue tax rate Senate Bill 840 Allows mixed-use and multifamily and single-family conversions in non-residential areas in cities near Richardson House Bill 24 Zoning protests must have at least 60% of property owners in the affected area to trigger a super majority vote.
SOURCE: CITY OF RICHARDSON/COMMUNITY IMPACT
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