Sherman proposes to keep property tax rates steady in 2022
Sherman is poised to continue its current rate and not increase property tax rates going into the 2021-2022 fiscal year. City staff proposed leaving the property tax rate unchanged when city leaders met this month for the city's annual budget retreat.
The decision to leave the rate mostly unchanged comes as the city issued more than $30 million of debt early this year in order to take advantage of historic low borrowing rates. However, recent growth and new developments have allowed the city to keep its rates steady despite the increased debt service.
"The council is proposing to leave the tax rate unchanged at 48.9 cents, and they were able to do that even with the increased 2021 debt because if increase to the tax base due to new growth and increase values. I think that is a great milestone for the city to continue to grow and expand while keeping the tax rate low."
For 2022, residents could pay $0.489 for each $100 of value on property taxes, just as has been since it was raised in the 2019-2020 fiscal year. While the ultimate total for the property tax has not increased, the distribution for this funding has. Under the proposed rate, about three cents will be transitioned from maintenance and operation funding to debt service, effectively reducing the amount that the city has for services and operations from $0.338 to $0.306 for each 100 of valuation.
"We accomplished our goal, even after issuing the COs (certificates of obligation), of leaving our tax rate unchanged," Hefton said.
This year's budget will include several projects that will be funded using the $30 million of bonds that the city issued earlier this year for a variety of projects including the ongoing new Sherman Police Station project and street rebuilds, among other projects.
During last week's budget talks, representatives for the police department said the new station is expected to cost about $17 million to complete and outfit. Planning for the project is ongoing with construction expected to begin within the next year. The station is expected to be completed some time in early 2023.
The city is also expected to continue work on expanding and extending various roadways, including those in areas expected to see development in the coming years. The city is likely to start construction on roads in the first phase of the Bel-Air development — a proposed $500 million mixed-use development along the intersection of FM 1417 and U.S. Highway 75.
During meetings Monday, the city approved $2.7 million in spending for the extension of Moore Street in anticipation of development closer to the new high school. The contract for the project was approved, but not without some concerns from the city council.
Some existing streets are also expected to see significant work over the next year as city crew fully rebuild four neighborhood roadways. Current plans call for Woods Street, Montgomery Street, Walnut Street and Grant Street, through phases, to be rebuilt in the upcoming year.
"We've spent money in the past on Lamberth, Taylor Street and 1417," Hefton said. "These are some heavily travelled streets in the heart of neighborhoods, and two of them are in the oldest parts of town."
Despite the good news of the tax rate, some members of the council worried about the precedent of lowering the funds used for operating the city. However, Hefton said he hopes this will be answered through continuous growth that will increase the city's tax base and through it the city's revenue.
"The big answer is it has to be growth — 30 or 60 percent of a bigger number is still a bigger number," Hefton said.