Data produced by Budget and Research Dept

This post introduces further background information on how the Garland proposed 2010-11 tax rate compares to other major Metroplex cities. Under City Manager Bill Dollar's proposed budget, the tax rate (70.46 cents per $100 valuation) would not increase, staying equal to this year's rate.
 
As mentioned yesterday, the property (ad valorem) tax is used for operations and maintenance and for debt service. Under the proposal, the portion that goes to debt would decline one-half cent and an equal amount would increase for O&M. The 2009-10 split was 55.2% O&M and 44.8% Debt. The 2010-11 split would be 55.9% O&M and 44.1% Debt.
 
To lower the portion for debt service, the city will have to refinance (taking advantage of historically low interest rates), defer payments to principal on new debt for two years, and rollover low-interest general obligation bonds for another year.
 
The same as shown in previous years, the portion that goes to O&M is lower than most major area cities and the portion that goes to debt is much higher. On the O&M side, Garland is 15% lower than the average among the other 11 cities and debt is 50% higher. Even keeping the tax rate the same, Garland is still 3% higher than the average of the other 11 cities. However, Fort Worth's very high rate skews that average upward. If Fort Worth is not included in the calculation, Garland is 7.5% above the average of the other 10 cities.
 
We are fortunate that interest rates are so low that we can chop the debt load some and transfer the savings to operations. The transfer is equivalent to almost half a million dollars. City tax revenues were down $5 million compared to last year. The good news: that has been projected and expected for well over a year and the current budget was structured for that continuing decline. The city has been very conservative in its projections and operations, enough so that no tax increase is necessary. We'll continue to be lean but that is prudent and necessary in the current economic environment.
 
Future posts will continue to look deeper into the budget and new fees.