The first of three readings of a 5.34% property tax rate increase was approved by the Graham City Council this week.
The increased rate approved during the first reading Thursday, July 17 is $0.69 per $100 valuation, an increase of $0.035 from the current property tax rate is $0.655 per $100 valuation.
The proposed rate increase is just under the voter approval tax rate of $0.690478 per $100 valuation. The voter approval rate is the highest tax rate the city may adopt without holding an election to seek voter approval of the rate.
“The voter approval tax rate may change, prior to final adoption of the proposed tax rate, as final property values have not been certified by the Young Central Appraisal District,” City Manager Eric Garretty. “Further, the city council may amend the proposed property tax rate to a value lower than the rate proposed in this ordinance but may not adopt a rate higher than the rate proposed in the first reading of this ordinance.”
The no-new revenue tax rate is $0.601 per $100 valuation. This rate is the tax rate that will raise the same amount of property tax revenue for the city from the same properties in both the 2024 and 2025 tax years.
The de minimis tax rate for the city is $0.697937 per $100 valuation. This rate is a calculation which is designed to give smaller taxing units, including cities with a population less than 30,000, flexibility to budget for costs that may not be possible under the voter-approval tax rate.
A public hearing on the proposed property tax rate at 11 a.m. Monday, Sept. 8 at the council chamber at 608 Elm St.
“Under Texas Local Government Code, if a Home Rule City proposes a property tax rate that is greater than the no-new revenue rate, then the governing body of the city must hold a public hearing on the property tax rate after the adoption of the annual budget but before Sept. 30 of each year,” Garretty said.
During the same meeting, the city approved the second of three readings of a 7% increase to water and sewer rates. Base meter and water volume charges are increasing by 7% across the board for both residential and commercial customers both inside and outside the city limits.
A public hearing on the proposed water and sewer rate increases will be held at 8:30 a.m. Thursday, July 31 at 608 Elm St. regarding the increases. A second reading on the tax rate and budget ordinances are also scheduled to be held with this regular city council meeting.
“If this ordinance (for the water and sewer rate increases) is not ultimately adopted, the impact is that the city will be forced to delay infrastructure replacement, will be unable to retain qualified operators to maintain the system, and will be unable to conduct required maintenance of the system,” Garretty said.
The proposed fiscal year 2025-2026 budget was presented to the Graham City Council during their meeting Thursday. The first reading of the proposed budget was approved during that meeting, with two additional readings required at later meetings.
A budget workshop will be held Thursday, Aug. 7 and a public hearing on the budget is set for 8:30 a.m. Thursday, Aug. 14. A town hall and public forum is set for 6 p.m. Tuesday, Aug. 26 and adoption of the budget is scheduled for 8:30 a.m. Thursday, Aug. 28. All of these meetings will be held at 608 Elm St.