Rockwall Voices Op-Ed
Campaign season is winding down—thankfully—and we are now seeing the usual wave of campaign promises being made, often without much explanation about how those promises would actually be achieved.
A common theme? Candidates pledging to “increase transparency” and “reduce property taxes.” Both are great ideas. However, anyone who has ever been elected quickly learns that delivering on these promises is a lot more complex than it sounds.
Let’s focus on one of the biggest topics: reducing property taxes.
Here’s the truth: for most of us, our property tax bill is made up of four parts:
1. School District (ISD) taxes
2. MUD/PID (Municipal Utility District/Public Improvement District) taxes
3. County taxes
4. City taxes
In Fate, our city tax rate is $0.259245 per $100 of valuation, making it one of the lowest city tax rates in North Texas.
Here’s what candidates often fail to mention:
• The State of Texas has been working to reduce school district property taxes since the 87th Legislative Session through significant increases in the homestead exemptions, We have already seen significant property tax reductions.
• MUD taxes are set by independent MUD boards—not by city councils. (That’s a topic for another day.)
• The only tax rate the city council has direct control over is the city tax rate.
So far so good.
You may have heard of the various rumors about cutting the budget by 20%, then 10%, then just “trim the fat”. Or let’s lower the city tax rate to the “no new revenue rate”
Good, let’s focus on the No-New-Revenue rate. First, we need to understand the concept of a De Minis tax rate. The De Minimis Tax Rate is a special property tax rate calculation under Texas law that allows growing cities to raise more revenue without triggering a voter approval election.
It is designed to help smaller, fast-growing cities keep up with infrastructure and service needs (like police, fire, and roads) as their populations increase. The City of Fate has used the De Minis rate for many years to hire new fire fighters, police officers, traffic officers , DPS pay raises, new DPS equipment, road maintenance, etc.
Let’s use the approved 2024/2025 city budget as our example for the No-New-Revenue Rate
• Approved City Tax Rate (De Minis Rate): $0.259245 per $100
• No-New-Revenue: $0.234024 per $100
• City Tax Decrease: $.025 per $100
• Revenue Reduction: ~$743,090
Since we should have a balanced budget, then the council must cut the budget by $743,090 or 4.3% of the General Fund budget of $17.4M with transfers. And the Fate DPS budget is $7.6M. Let’s assume that Fate DPS will not see budget cuts.
What do you cut? Let’s start with the City Council budget of $94,900. You cannot cut worker compensation of $9,680 so that leaves you with $85,220 in reductions, including cutting the Meals-on-Wheels funding and Fate senior activity programs. Even after wiping those out, you’d still need to cut $657,870 more.
So, what’s next? Facilities? Water and Sewer Operations? Road Maintenance? Public Safety? None of these cuts are painless—and none are small.
It gets harder:
• In the next budget cycle, the Council must raise the city tax rate by $0.0389 per $100 to pay for the voter-approved DPS bond (approved by over 62% of voters).
• HB 442 (Bell) is likely to pass, which will reduce the appraisal from 10% to 5%— great for taxpayers, but it will further limit city revenues.
• New construction this year is projected to add less than ~$80,000 in new property tax revenue from new properties—not nearly enough to offset reductions.
More challenges:
• The new City Council will be asked to approve a 20% General Homestead Exemption for homeowners.
o What is it? It reduces the taxable value of a homeowner’s primary residence by 20%, saving the average Fate homeowner about $162 per year. This will cover the Fate DPS bond tax increase of around $126 per year.
o But: It will shift the tax burden to non-homestead properties, including Fate small businesses, apartments like Jameson Apartments and Gala at Fate, and even our senior communities
o Only larger cities — such as Dallas, Farmers Branch, and Grapevine — with significant sales tax bases have approved the 20% exemption. For clarity, no city in Rockwall County has adopted this exemption, in part to avoid shifting more of the tax burden onto small business owners.
An odd twist:
• Due to the 20% General Homestead Exemption calculations, the De Minimis Rate for 2025–2026 will increase from $0.259245 to $0.33129—a 7.2 cent increase.
o Here is the breakdown:
§ $0.039 for the DPS bond
§ $0.032 for the 20% homestead exemption (range from $0.031 to $0.033)
Bottom Line for 2025/2026.
• Yes, the city tax rate will likely increase.
• But your overall property taxes—driven largely by school district property tax homestead exemption increases—could decrease our property taxes to historic lows.
Real leadership means balancing tax relief with funding essential government services, protecting our seniors, maintaining our roads, water/sewer, parks, and supporting public safety.
About the Author:
Disclaimer: The views and opinions expressed in this Op-Ed are those of the author and do not necessarily reflect the official stance of The Rockwall Times. We encourage a respectful exchange of perspectives to enrich our community dialogue.
