City of Sealy Mayor Mark Stolarski penned a letter explaining the city property tax rates for people to better understand how city property taxes are determined. ย His letter is as follows:
Explanation of How City Property Taxes are Determined
Lately, several people have asked me to explain property taxes and how they are determined.ย Iโm sure that many others have this same question.
There are two separate components to city property tax rates:ย M&O and I&S.ย Added together, these two components equal your total city property tax rate.
M&O RATE
The M&O tax rate funds the โMaintenance & Operationsโ of your cityโs general fund.ย This includes such items as maintenance of equipment, purchasing of equipment, purchasing of supplies (such as fuel, electricity for street lights, and office supplies), employee salaries, licenses, certifications, and contractors.ย This rate is tied directly to the cityโs proposed budget.ย The more efficiently and effectively a city operates, the less this rate can be.ย Basically, this M&O rate funds what the city expects to spend during the next fiscal year, which is October 1, 2015, through September 30, 2016.
The 2014 M&O tax rate (taxes levied in October 2014) for the City of Sealy was $0.20867 per $100 of appraised taxable value.ย The proposed 2015 M&O tax rate (for taxes to be levied in October 2015) is $0.18630 per $100, which is a decrease of $0.02237 per $100.ย This decrease in the M&O rate is a result of efforts by the current city council and city staff to trim the budget by running the city more efficiently and more effectively.ย This trimming resulted from actions such as:
– lowering line item requests to be more in-line with actual past expenses
– eliminating โwantsโ while funding โneedsโ
– consolidating line items (for example, lawn maintenance) under one department rather than having multiple departments budgeting for similar items
I&S RATE
The I&S tax rate funds the โInterest & Sinking Fundsโ portion of the city budget.ย Basically, this is that portion of your city property tax that pays off city debt, such as general obligation funds and certificates of obligation (COs).ย The upcoming I&S rate will fund obligations incurred from January 1, 1997, through February 1, 2015.
The 2014 I&S tax rate (taxes levied in October 2014) for the City of Sealy was $0.12798 $100 of appraised taxable value.ย The proposed 2015 I&S tax rate (for taxes to be levied in October 2015) is $0.26370 per $100, which is an increase of $0.13572.ย This increase is a direct result of the $15 million certificate of obligation that was incurred in February 2015 by a split vote of the council.ย The current members of council cannot reduce this rate.
TOTAL TAX RATE
The total tax rate is the combination of the M&O rate and the I&S rate.
The 2014 total adopted property tax rate (levied in October 2014) for the City of Sealy was:
ย ย $0.20867 (M&O) + $0.12798 (I&S) = $0.33665 per $100 of appraised taxable value
For the 2015 tax year, the proposed total tax rate for the City of Sealy is:
ย ย $0.18630 (M&O) + $0.26370 (I&S) = $0.45000 per $100 of appraised taxable value
As you can see, despite the current city councilโs ability lower the proposed M&O rate by $0.02237 per $100, the $0.13572 increase in the I&S rate will force a total tax rate increase of $0.11335 per $100.
For more detailed information about the cityโs financial status (current and past budgets, obligations, etc.), you can visit the City of Sealyโs โFinancial Dashboardโ at http://ci.sealy.tx.us/default.aspx?name=dashboard or stop by city hall.
Sincerely,
Mark A. Stolarski
Mayor, City of Sealy
