Sunday, February 9, 2025

Around Argyle – September 2022

Fall is here, thankfully. With the cooler weather (highs in the 90s!) and the start of the school year, the life of our community is at its best. The small-town culture of sports, academics and the arts fostered by our exceptional schools blesses our town at this time of year and brings us together.

We are also in the thick of budget season and this is the perfect time to talk about how the budget and tax-setting process works.

At the end of the government fiscal year, Texas cities and other entities (such as school districts) that are funded with property taxes are accountable to tell taxpayers how much money they need to operate, in detail, in the year ahead. After their budgets are disclosed to the public and approved, the taxing bodies vote to adopt a property tax rate that will generate the revenue shown in the budget, subtracting other anticipated revenues like sales taxes. If you pay property taxes, your tax rate may go up or down every year depending on the appraised value of the property in a jurisdiction.

Why would tax rates go down? Under the Texas Property Tax Reform and Transparency Act, or Senate Bill 2 (SB2), passed into law in 2019, property tax revenue for a city may only rise by 3.5% per year without voter approval. SB2 has forced Argyle’s property tax rate down for the last two years as our property assessments have risen.

The budget process in Argyle began with the town department heads listing their requirements to fund the town’s operations on a clean sheet of paper, in a form of zero-based budgeting selected by Town Administrator Erika McComis.

The department head input was converted into a complete budget proposal by the town staff during the first week of August, meeting the state’s requirement that a budget proposal be filed and available in the custody of the town secretary at least 30 days prior to a vote to approve the budget by the Town Council. The budget was also posted on the Argyle website.

The budget proposal and an ad valorem property tax rate that will fund the town for FY2022-2023 of $0.365347/$100 was presented to the Town Council on Aug. 8 at a special meeting. This rate is a reduction from the rate of $0.378193/$100 set in 2021. The Town Council approved proposing the new property tax rate and held a budget workshop providing citizens with an opportunity to view and participate in a budget discussion on Aug. 29.

A formal hearing on the proposed budget and tax rate will be held at a regular meeting of the Argyle Town Council on Sept. 19, at which time a vote will be held on the approval of the budget and tax rate. If the budget and tax rate passes, the Town Council must then vote to ratify the tax rate in a roll call vote.

This is an involved and lengthy process, but the important action steps and decisions are in full public view. The business of setting tax rates and deciding how to spend taxpayer money should offer plenty of opportunity for citizens to participate and it should not be rushed.

The good news headline for this year’s budget is that Argyle has a healthy operating budget and can meet its obligations without financial stress in 2023, and likely in 2024. Sales tax revenue passed $1 million for the first time this year and should continue to grow at a good clip as our population increases and online shopping per household continues to support this revenue source. We are collecting a similar amount in permitting fees for new construction. In total, our operating budget for the coming year is a little over $5 million.

On the other hand, the town has many capital project needs. Growth in our residential real estate and small commercial property tax base, sales taxes and other sources of revenue will not support spending for big projects, like a new police station and the renovation or replacement of town hall. The police station price tag is at least $4 million. We do not have the borrowing capacity available to fund this important need. Critically important road construction projects have absorbed our borrowing capacity over the last three years.

Fortunately, several projects that are aligned with Argyle’s comprehensive plan and offer the opportunity to boost our ability to borrow through the issuance of property tax backed bonds are on the horizon. In coming weeks and months, citizens will have an opportunity to consider and comment on commercial development projects on FM 407 and I-35W. I encourage citizens to participate in the budget process ahead and in the public conversation about the essential commercial development projects that the town needs to fund the budgets of the future.

CTG Staff
CTG Staff
The Cross Timbers Gazette News Department

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