Homeowner property taxes don’t pay for it all in Round Rock, by design

Editor’s note: This is the first in a series of posts on the fiscal 2019 budget and tax rate 


Round Rock’s success is by design. We develop long-term plans for major infrastructure like roads and water, as well as quality of life amenities like parks and recreation and library services. We’re able to implement those plans because we’ve got the long-term fiscal planning in place to fund them. 

Our Strategic Plan ties it all together to provide a blueprint for sustainable growth. The annual budget ensures funding for what needs to get done over the next 12 months – from police staffing to street maintenance – to keep Round Rock an amazingly livable city. 

And the property taxes paid by you and other homeowners funds the whole shebang, right? 

Not even close. 

Property taxes cover only 33 percent of our General Fund, which includes core services like Police, Fire, Library, Transportation and Parks. And almost half of that 33 percent is paid by commercial and multifamily properties, with the remainder funded by single family property owners.  

Put another way, for the $114 million in General Fund revenues forecast for fiscal 2019, single-family homes will contribute $20.1 million, or less than 18 percent. 

So, other than property taxes, where does the rest of the money for our General Fund come from? Sales taxes make up the majority of revenues at 44 percent, with other fees and service charges covering the remaining 23 percent.  

When you look at those percentages, it’s easy to see just how much economic development and attracting destination retailers like Premium Outlets and Bass Pro Shops helps us reduce the burden on homeowners to pay for basic City services. 

Think about this this way: If all the City had was property tax revenue to fund general government, we could afford Police and the Library, with a couple million dollars left over for everything else – Fire, Parks and Recreation, Transportation, General Services and support services like Finance and Information Technology.  

To drill down even further: If all the City had was single-family property tax revenue, we couldn’t cover the $22.4 million Fire Department budget. 

Property tax proposal 

Let’s look at the proposed property tax rate. The City Council is considering a property tax rate of 42 cents per $100 of valuation, which is a penny lower than last year’s tax rate. The proposed rate is an increase of 3.4 percent above the effective tax rate of 40.6 cents, which takes into account the 6 percent growth in existing property values from last year.  

At the proposed rate, the owner of a median value home worth $241,538 will pay $85 per month in City property taxes next year. That’s an additional $2.94 per month compared to this year.  

No one likes paying more in taxes, certainly, but it might help if you know what that proposed tax increase is paying for: 71 percent is going toward additional street maintenance in our neighborhoods; 21 percent for the 2013 voter-approved bond program; and 8 percent for increased services related to population growth and rising costs. 

All told, that median value homeowner will pay $1,014 for City services in 2019.  

But wait, you say. My tax bill is more than 5 times that.   

Indeed. 

The City of Round Rock is only 18 percent of your total property tax bill. Round Rock ISD is 56 percent, Williamson County is 20 percent, and Austin Community College and the Upper Brushy Creek Water Control and Improvement District make up the remaining 6 percent.

Still, City property taxes could be a lot higher. Seriously. 

If voters hadn’t approved increasing the local sales rate back in the 1980s, your City property tax bill would be 25 percent higher. A half-cent of the 2 cents in local sales tax that shoppers pay in Round Rock goes directly to property tax reduction. That half-cent is equal to 14 cents on the property tax rate. That saves the median value homeowner $28 a month on their City tax bill. That’s a really great reason to Shop the Rock 

Bringing in more sales tax revenue is a goal of our Sports Capital of Texas tourism program. Those visitors who come to play here also shop and dine here, and thus help pay for basic City services and take upward pressure off the property tax rate. 

By no means are we saying quit complaining about property taxes. We’re just offering some perspective on how we leverage property taxes to fund City government in Round Rock at a great value. Providing remarkable value to our property taxpayers has been a foundational element in Round Rock’s Blueprint for Success for many years, and this year’s budget and tax rate are no exception.