Page 21 - Southlake FY23 Budget

TRAnSmITTAL LETTER

Southlake’s property values have tAxABle VAlue compArison
increased appreciably over time, as FY 2021 - FY 2022
shown in Figure 7. The difference
between assessed value and FiscAl % increAse new new
taxable value is primarily due to tax YeAr VAlue prior YeAr construction construction
rate reductions and exemptions. As % oF totAl
2022 $8,220,731,143 5.8% $155,257,208 1.9%
State law requires a taxing unit to
calculate two rates after receiving 2023 $9,064,721,083 10.3% $128,609,945 1.4%
its certified appraisal roll – the no
new revenue tax rate and the voter Figure 6: This chart compares taxable property values for
approval tax rate. The no new FY 2022 with those for FY 2023.
revenue rate is the rate that will generate the same amount of property tax dollars as the previous year, excluding
new construction and annexations, when the two years are compared.

If a city adopts a tax rate exceeding the voter approval rate (3.5 percent maintenance and operation rate growth,
plus “unused increment rate”), then the city must hold an automatic election. Depending on the ultimate rate
that is chosen by the city and its relationship to these legally defined rates, there are requirements that must be
followed to comply with truth-in-taxation laws. These requirements protect the public’s right-to-know concerning
tax rate decisions.

As shown in Figure 8, Southlake’s calculated no new revenue and voter approval rates are higher for FY 2023 than
the proposed tax rate. Therefore, the tax rate is not subject to an automatic election.

Revenue highlights. The proposed FY 2023 budget projects $53,954,094 million in General Fund revenues, an
increase of $4.4 million or 8.9% from the FY 2022 adopted budget.

Staff is estimating $26,990,927 in property tax revenue, an estimated increase of $328,551 or 1.2% over the FY
2022 adopted budget. This projected revenue reflects the proposed tax rate decrease.

Staff forecasts a 21.3% increase in sales tax revenue. The sales tax collection trend is shown in Figure 8 on the next
page. The City expects to collect almost $20 million in sales tax in the General Fund for FY 2023.

Franchise fees collected from private $13,000 ASSESSED VALUE TAXABLE VALUE
utility companies operating in the $12,177
city provide another source of $12,000
General Fund revenue, $2,969,000. $11,000 $10,714 $11,138
This is a projected increase of 5.1% $10,526
when revenue is compared to the $10,000 $9,810
FY 2022 budget. Fine collections, $8,743
another source of revenue, are $9,000 $8,269 $9,065
expected to total $897,700 in FY VALUATION IN MILLIONS OF $ $8,000 $8,221
2023, an increase of 5.2%. $7,000 $6,760 $7,323 $7,287 $7,770 $7,769

The proposed budget anticipates $6,000 $6,369 $6,662
$1,512,100 in revenue from permits $5,680 $5,785
and fees in FY 2023. $5,000
$4,000
Staff is estimating that 50 residential
building permits will be issued $3,000
during FY 2023, which is comparable 2015 2016 2017 2018 2019 2020 2021 2022 2023
to FY 2022 projections. Revenue Figure 7: Comparison of property values since FY 2015 (assessed and taxable)

20 FY 2023 City of Southlake | BUDGET BOOK
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