The Tax Cut That Isn't
Plano's Property Tax Rate for 2016-2017
On Monday, September 12, 2016, the Plano City Council unanimously passed a new property tax rate. The Mayor said that residents got a tax cut, but the dollar amount on our bill went up. How can this be? If we got a tax cut, then our bill should have gone down. Unfortunately, in the political world, a "tax cut" can be a tax increase. Allow me to explain.
The 2015-2016 tax rate was 48.46 cents per $100 of taxable value. Home values for 2016-2017 went up. If the city wanted to collect the same amount of money for next year as they did in this one, the tax rate would be 45.80 cents. That number is called the effective tax rate. With a rate of 45.80 cents our tax bill for next year would be the same amount as this year. Anything below 45.80 cents would be a tax cut.
The tax rate the city council approved for 2016-2017 was 47.86 cents. That is a one-cent decrease from the original tax rate of 48.46 cents; however, it is a two-cent increase from the effective tax rate. That means the city will collect $7,076,621 more. It also means residents will pay a bigger property tax bill.
The Mayor is being dishonest when he says the city council cut our taxes. The city council cut the amount our bill would have gone up, had they reinstated the original rate of 48.46 cents. In the political world, this is a tax cut. In the real world, this is a tax increase. Please don't be fooled, we did not get a tax cut. People who try to tell you otherwise are trying to trick you.
Plano's Political Pit Bull signing off