At Monday evening’s Special City Council meeting (September 28, 2020), Councilmembers voted unanimously to approve a .1645 tax rate for the upcoming fiscal year starting on October 1. That rate is the same for the previous fiscal year, which is below the .1653 tax rate (or the No New Revenue rate) discussed at the City Council meeting on September 21. Since the new tax rate was approved and is below the No New Revenue (NNR) rate, less tax will be collected for the City overall from property owners than the previous year. The City’s operating budget for FY 2020 was $15,134,598. The operating budget for FY 2021 will be $15,061,751, which was also approved at the same meeting.
The NNR tax rate (.1653) produces the same amount of tax for the city if applied to the same properties in both years. The reason the NNR tax rate (.1653) was calculated higher this year than the previous year is due to the fact that total taxable values (minus any new properties added in the past year) actually decreased. Since the City is maintaining the .1645 tax rate for the coming fiscal year, there will actually be less collected overall from property owners. The average home value in Lakeway is $563,010, which would equate to an average city property tax bill under the current and approved .1645 tax rate of $926.
In August, City Council voted to consider a not-to-exceed proposed rate increase of 3.5%, which was eventually adopted below 0%. In order to reach that level, City Manager Julie Oakley was able to calculate additional revenue from sales tax and city FY 2020 budget savings, along with trimming additional expenditures from the FY 2021 proposed budget. With the newly approved FY 2021 budget, city cash reserves will be at 34%, which is still well above the 30% target threshold.
Depending on where you live (based on the different water and fire districts within the city), the City of Lakeway encompasses about 6 to 9 percent of the full property tax bill for homeowners. That small portion goes to help fund several important city services, such as our police, parks and recreation (including events, swim and activity center operations, park maintenance and landscaping), code compliance, permitting, public works (local road maintenance), and other services.