Local NewsTaxes & SpendingCity in Northeast Tarrant County Lowers Tax Rate for Homeowners Three Years in a Row

Southlake’s mayor says his city is committed to fiscal responsibility, leading it to lower its tax rate while maintaining the highest homestead exemption allowed by state law.
September 6, 2021
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All politics is local and that especially applies when it comes to a homeowner’s property tax bill. Cities, counties, school districts, and a few other governmental entities will be voting in the upcoming weeks to set new tax rates for the coming year, but one city in Northeast Tarrant County continues to lower its tax rate year after year.

Southlake, which has a population of about 31,000, is lowering its tax rate for the third year in a row. 

Mayor John Huffman told The Texan that it is a demonstration that the city’s leaders are committed to being fiscally responsible. “We want to continue to deliver tax relief to our homeowners,” adding that “we are focused on being responsible with [the taxpayers’] money.”

He also pointed out that the city has adopted the maximum homestead exemption allowed by state law — 20 percent — for the fifth year in a row.

“Citywide we are collecting less in [ad valorem] tax revenue,” Huffman said.

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A decade ago the city’s ad valorem tax rate was $0.462 per $100 valuation with no homestead exemption. For Fiscal Year (FY) 2022, it will be $0.390 per $100 valuation, down 7.2 cents from a decade ago and 1.5 cents from last year. According to city budget documents, the average residential property value in Southlake increased by $40,000 to $793,970. If an average homeowner’s property appraisal increased by the same amount, he would pay $40 more this year than last. At the previous tax rate, the homeowner’s bill would have increased by almost $100.

The city’s budget projects an increase in sales tax revenue by almost 15 percent and a large increase, 147 percent, in hotel tax revenue, likely due in part to the renewed travel taking place after the height of the COVID-19 pandemic in 2020. According to budget projections, the city will collect more in sales tax revenue than in property tax revenue. 

Huffman was clear that CARES Act funding was not a factor in the decision. “COVID relief funds are use-restricted, and we don’t rely on short-term funding for long-term expenses,” he told The Texan.

On either side of Southlake, Colleyville and Grapevine have lower property tax rates. Colleyville, which has a population of about 26,000, is planning to lower its tax rate from $0.304 to $0.291 per $100 valuation. The city does not offer a homestead exemption to its property owners. But even without a homestead exemption, the tax bill for a home with Southlake’s average value located in Colleyville would pay about $170 less in property taxes to the city than a Southlake owner.

Although Grapevine, a larger city of over 50,000 in population, has the lowest tax rate in the area, its proposed tax rate for FY 2022 — $0.272 per $100 valuation — will generate more income than last year and so is considered by law to be a tax increase. The average homeowner of a home appraised for $289,271 in Grapevine will pay $786.27 next year.

One of the highest city property tax rates to be found in the Northeast Tarrant area is in North Richland Hills, which is proposing a $0.572 per $100 valuation rate for FY 2022. If adopted, this rate will also be considered a tax increase because it will raise seven percent more in tax revenue for the city than the previous year’s revenue. The average homeowner in North Richland Hills will pay $1260.22 in taxes.

Because of the winter storm in February, state law would allow cities to raise property taxes by up to eight percent without voter approval. None of these cities are choosing to follow that course of action.

Update: The article has been updated to better clarify the potential change in a Southlake homeowner’s tax bill. 

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Kim Roberts

Kim Roberts is a reporter for the Texan in the DFW metroplex area where she has lived for over twenty years. She has a Juris Doctor from Baylor University Law School and a Bachelor's in government from Angelo State University. In her free time, Kim home schools her daughter and coaches high school extemporaneous speaking and apologetics. She has been happily married to her husband for 23 years, has three wonderful children, and two dogs.

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