HomeMy WebLinkAboutItem 07 - School Finance ReformITEM I 1
MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ROGER NELSON, CITY MANAGE 5e(/
MEETING DATE: MARCH 23, 2004
SUBJECT: RESOLUTION REGARDING SCHOOL FINANCE REFORM
With a special session of the Legislature looming on the reform of the State's school
finance policies there is a great deal of concern that the reforms may result in changes
that are detrimental to the financial well being of Texas cities. The Governor's plans,
introduced two weeks ago could negatively affect our ability to continue to reduce
property taxes and remain fiscally sound.
While the resolution of the school finance system is something that needs to be
addressed the by the Legislature, the creation of new restrictions on cities are not
necessary. In the same way that voters entrust Legislators to wisely use the financial
tools at their disposal, they also trust their City Councils to do the same. The City of
Grapevine has lowered its property tax rate from 49¢ per $100 of assessed value in
1985 to its current rate of 33.6¢. Throughout the recession over the last two years
Grapevine's sales tax receipts have dropped and the City's largest taxpayer has gone
from a taxable value of $735,998,070 to $313,758,237. Through all of this, the City did
not increase its tax rate. Instead, cuts were made in personnel, capital expenditures
were put on hold and employee salaries were frozen.
Now that the economy is beginning to grow again the value lost since September 11,
2001, has the chance to return. To freeze revenue growth would only insure that
Grapevine's fiscal health will not return. It is the City Manager's recommendation that
the City Council approve the attached resolution regarding school finance reform.
March 18, 2004 (3:08PM)
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS OPPOSING ANY SCHOOL FINANCE OR
TAX SYSTEM REFORMS THAT WOULD NEGATIVELY AFFECT
CITY REVENUES AND ADVERSELY IMPACT THE CITY
PROVIDING ESSENTIAL CITY SERVICES TO ITS RESIDENTS;
AND PROVIDING AN EFFECTIVE DATE
WHEREAS, it is likely that the Texas Legislature will address school finance and
tax system reforms in the near future; and
WHEREAS, during these deliberations by the Texas Legislature, proposals to
limit the ability of cities to collect property taxes and sales taxes are likely to be offered
by some members of the Legislature and the Governor; and
WHEREAS, restrictions of city taxation do not address the real issue of how to
fund education in Texas; and
WHEREAS, all Texas cities combined collect 15.3% of all property taxes
collected in the State of Texas, while schools collect more than 60%; and
WHEREAS, between 1985 and 2002, the municipal share of all property tax
revenue fell from 20.3% to 15.3%; and
WHEREAS, adjusted for inflation, municipal property tax revenues went up by
only 37% between 1985 and 2002, while population grew by 33%, demonstrating that
growth in municipal property tax levied roughly matched population growth; and
WHEREAS, property tax represents 30% of the City's annual budget and is an
important revenue to build basic infrastructure improvements, to ensure public safety
through police and fire departments, and to provide numerous essential services for City
residents; an
WHEREAS, Texas cities engage in numerous economic development activities
that produce jobs and revenue for the City, the surrounding geographical area, and the
entire State of Texas; and
WHEREAS, cities must continue to meet the challenges of homeland security
and compliance with state and federal mandates, many of which are unfunded
mandates; and
WHEREAS, Texas cities have shown over the years that they are fiscally
responsible and good stewards of taxpayers' money; and
WHEREAS, the City of Grapevine has dropped its tax rate by 12.4 cents since
1985 to help offset increases in valuations to our citizens; and
WHEREAS, efforts to limit the ability of cities to collect sales and property tax
revenues or to set tax rates would have severe negative impacts on City services, City
employees, economic development efforts, and ultimately citizens of the State of Texas;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That the City Council of the City of Grapevine opposes all school
finance or tax reform efforts by the Texas Legislature that negatively impacts the ability
of the City of Grapevine to provide essential services, conduct economic development
activities and ensure public safety by limiting our ability, beyond the provisions of
current law, to collect property tax or sales tax revenues.
Section 2. That this resolution is effective from and after the date of its signing.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE,
TEXAS on this the 23rd day of March, 2004.
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ATTEST:
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` APPROVED AS TO FORM: