Plano homeowners may want to take a deep breath: city officials signaled at last Monday’s City Council meeting that higher property tax bills could be on the horizon after a new five-year financial forecast showed expenses climbing faster than revenues. Staff told council members that rising inflation, bond-funded projects and a shift in public-safety staffing are driving the growing gap between likely revenues and the city’s spending plans. The presentation outlines scenarios in which the council may need to raise the property-tax rate to protect fund balances and avoid cutting services.
Director of Budget and Research Karen Rhodes-Whitley, joined by consultants from NewGen Strategies and Solutions, walked the council through a series of models testing different tax-rate choices. Departments are now finalizing their budget requests, and the city manager is set to compile a recommended budget to bring back this spring. As reported by Community Impact, the council will take public input on the proposal over the summer before adopting a budget.
Forecast, Revenue Scenarios and Risks
The city’s forecast shows general-fund appropriations growing at roughly 3.2% per year, while total market value is modeled to increase about 3.3% annually. The catch is that exemptions and property-tax freezes mean much of that market-value growth will never show up on the taxable rolls, which tightens the city’s wiggle room.
NewGen’s scenario analysis finds that keeping a flat “no-new-revenue” rate would allow appropriations to outpace revenues and gradually draw down reserves. By contrast, the “voter-approval” scenario, which allows about a 3.5% annual increase on existing property values, would restore fund balances more quickly. These projections are detailed in the City of Plano presentation.
Public Safety and New Facilities Are the Big Drivers
Much of the pressure in the forecast comes from public-safety and capital costs tied to specific facilities. According to the City of Plano, Fire Station No. 8 is programmed for a remodel in 2027. The 2025 bond’s Proposition D would add Fire Station No. 14, expected to come online in fall 2028, as outlined by the City of Plano. Both projects bring new operating costs once they open…