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Truth-in-Taxation Frequently Asked Questions
If our taxing unit wants to adopt a tax rate that is equal to or lower than our no-new-revenue tax rate, are the two public hearings required?
No. Simply adopt the tax rate at a regular meeting (assuming that the voter-approval rate is higher than the no-new-revenue rate). 1 The adoption of the tax rate must be a separate agenda item. The maintenance and operation (M&O) and debt rates must be adopted separately.2
How do you calculate the percent of increase for notices?
Subtract the difference between the proposed tax rate and the no-new-revenue tax rate. Then divide the difference by the no-new-revenue tax rate to get the percent of increase.
Do we have to post public hearing notices on our website?
Tax Code Section 26.065 requires certain notices be posted on a website that the taxing unit owns, operates or controls.
Why is my voter-approval rate lower than my no-new-revenue tax rate?
The voter-approval tax can be lower than the no-new-revenue tax rate when there has been a substantial reduction in debt owed by the taxing unit.
Can we adopt a lower debt rate than what we published in the newspaper?
Taxing units other than school districts, water districts and small taxing units must adopt the published debt rate.4 School districts may adopt a rate lower than the published rate if the calculated rate decreases after publication.5
How can I determine if I qualify as a small taxing unit?
A small taxing unit is one that sets a tax rate lower than $.50 and raises less than $500,000 when multiplied by the current taxable value. Small taxing units have a special notice process.6
If the same tax rate as last year is proposed, are public hearings and quarter page ads required?
Last year’s tax rate is not relevant to the current year’s truth-in-taxation requirements. If the tax rate proposed by the governing body does not exceed the lower of the no-new-revenue tax or the voter-approved tax rate, a public hearing and quarter page ads are not required.7
What happens if a taxing unit adopts a tax rate over its voter-approval tax rate?
A taxing unit, other than a school district, that adopts a tax rate greater than the voter-approval tax rate is required to hold an election on the next uniform election date.8 If the adopted rate is lower than the de minimis rate and greater than the voter-approval rate, the voters may petition for an election on the tax increase.9