Page 95 - Hurst FY19 Approved Budget

Enterprise Fund debt). However, the city may pledge the City’s taxing authority to
proprietary fund debt as a way to lower risk to investors and associated costs.

Tax exemptions impact revenues generated from property taxes and debt service
payments. The City grants a 20% homestead exemption, $35,000 senior citizen
exemption, $35,000 disabled citizen exemption, and up to a $12,000 disabled veteran
exemption. The City has for many years granted the maximum homestead exemption,
which began at 40% and decreased by law to 20%. The senior citizen exemption and
disabled citizen exemption increased from $30,000 to $33,000 for fiscal year 1995-1996.
The exemptions were increased again from $33,000 to $35,000 in fiscal year 2000-
2001. These exemption changes are a direct result of the Anti-Crime Half Cent Sales Tax
implementation in 1995 which was renewed in May 2010 by the voters for an additional
twenty years.

In addition to the exemptions offered by the City, senior and disabled residents will
again benefit from an adopted “tax limitation” this year. In September 2003, Texas voters
approved a constitutional amendment that authorized a local option tax limitation on
residential homesteads of persons disabled or 65 years of age or older (seniors). The City
of Hurst exercised its local option by adopting the tax limitation on February 10, 2004.
The tax limitation works by ensuring that a senior or disabled homeowner will not have a
municipal tax bill any higher than the amount owed in the year in which he/she became
eligible for the limitation (by turning 65 or becoming disabled). Those who were 65 or
disabled when the tax limitation was adopted automatically became eligible to receive
the tax benefit. However, the law states that the limitation does not provide retroactive
benefits. The City will continue to see a compounding impact in future revenue due to
this relatively new law. The senior and disabled tax limitation will provide $780,000 of
tax relief to eligible taxpayers in 2018-2019. The Finance Department has included tax
limitation estimates in its long-range plans.

Sales Tax
Sales tax revenue projections shall be conservative due to the volatile nature of this
economically sensitive revenue source. The 2018-2019 sales tax projections, including
the sales tax reserve, have been adjusted to account for recent downward trends
and other indicators related to sales tax. While still healthy, the sales tax reserve has
been reduced allowing for an increase in budgeted sales tax; however, we anticipate
actual collections to decrease by approximately -.08%. During 2018-2019, the City saw
monthly sales tax increases ranging from 1.6% to 8.9%. Fiscal year 2018-2019 marks
the seventeenth year of a 20-year sales tax sharing agreement with the developer of
North East Mall. Under this agreement, the developer receives a rebate for a portion
of sales taxes earned above the rates prior to the expansion of North East Mall and the
construction of Shops at North East Mall. The developer’s rebate is capped in both time
and total dollars. The shops portion of the agreement reached maximum value during
the 2008-2009 year allowing the City to begin collecting 100% of associated sales tax

78