2016 Tax Rate FAQs

1.  When and where can citizens next meet to discuss the proposed 2016 NRH property tax rate?

The City conducted three public hearings on the tax rate.  During these public hearings, individuals wishing the express their views on the tax rate were afforded an opportunity to do so.  These public hearings were held during the August 22, September 12 and September 19 City Council Meetings. Citizens who were unable to attend may email their comments about the proposed tax rate to the City Council.

2.  Is it true that state law requires the city to hold public hearings because its proposed rate exceeds the lower of the effective or rollback tax rate?

It is true.  Texas state law requires the City to conduct two public hearings if the proposed tax rate exceeds the lower of the effective tax rate or the rollback rate.  Since the proposed tax rate of 61 cents exceeds the effective tax rate as calculated this year, North Richland Hills was required to hold two public hearings.  This year, North Richland Hills is holding three public hearings, one more than required.  These public hearings were advertised in the Star Telegram on August 10, August 31 and September 9.

Notice of these public hearings was also included on the city’s website and  advertisements were run on Citicable, the City’s government access channel. In addition, the public hearing notices were included in the City’s e-newsletter, and citizen who sign up for emails to be notified when changes are made to the web site would have received notice when the public hearing notices were added to the web site.

3.  What is the “effective rate”? Where does NRH currently stand relative to the “effective rate”?

The effective tax rate is a calculated rate that would provide the taxing unit with about the same amount of revenue it received in the year before on properties taxed in both years. If property values rise, the effective tax rate goes down and vice versa.

Although the actual calculation is fairly complicated, a taxing unit's effective tax rate is a calculated rate generally equal to the last year's tax revenue divided by the current taxable value of properties that were also on the tax roll last year. The resulting tax rate, used for comparison only, shows the relation between the last year's revenue and the current year's values. 

The North Richland Hills calculated effective tax rate for Tax Year 2016 is 58.3909 cents per $100 of valuation.  The proposed tax rate is 61.0000 cents per $100 of valuation; 4.47% higher than the effective tax rate.

4. When will the 2016 property tax rate be adopted?

The City Council is scheduled to vote on the proposed 61 cent tax rate during the September 26, 2016 City Council meeting, which will begin at 7:00 PM.  This vote will take place in the City Council Chambers located on the third floor of City Hall. 

5.  What recourse do citizens have to change the 2016 property tax rate? By what date must they do this?

Citizens are encouraged to speak during at each public hearing on the proposed tax rate.  Citizens who are unable to attend the public hearings are encouraged to email comments about the tax rate to the City Council prior to September 26.

6. Is the city's 2016 property tax rate set to be raised from 2015?

The 2016 tax rate is not set to be raised from 2015.  The North Richland Hills property tax rate is proposed at 61 cents per $100 of valuation.  This is the same tax rate that was adopted in 2015.  If adopted, this will be the fifth consecutive year that the property tax rate was set at 61 cents.  An individual tax payer may pay more tax, less tax, or the same amount of tax to North Richland Hills as in the previous year, depending on changes in the value of their property.

7. What is the senior / disabled tax freeze? 

The senior / disabled tax freeze ensures that a senior or disabled person will not have a city tax bill any higher than what was paid in city taxes in the year the homeowner turns 65 or becomes disabled, even if there are increases to their property value or the tax rate. 

The amount a senior or disabled homeowner pays in city taxes can decrease if the value of the property decreases or the tax rate is decreased and would result in a lower amount to be paid in taxes than the frozen amount.  However, if in subsequent years the value increases and/or the tax rate increases, the homeowner can pay more in property taxes but not more than the amount previously frozen. The cap does not reset.  

If improvements are made to the home (such as an addition, not general maintenance type improvements), then the tax bill can go up by the amount of taxes related to the improvement.  This amount added to the previously frozen amount would then become the new ceiling on the amount of taxes a homeowner would pay.

If a homeowner benefits from the freeze, sells their home and buys a new home of higher value, the freeze will apply to the new home at the same proportion as the freeze applied to the home they sold.

The tax freeze may be passed on to a surviving spouse if the surviving spouse is 55 years of age or older at the time of the eligible homeowner’s death and continues to reside in the residence.

To verify that you have the senior tax freeze in place, contact the Tarrant Appraisal District at 817-284-0024.

8. What property tax exemptions does the city offer and how are they applied/calculated? 

North Richland Hills resident can receive a 15% homestead exemption, plus a $36,000 exemption if they are a senior citizen (65 and older) or disabled. 

We will use a home valued at $199,954 as an example, which is the average Market Value of a single family home in North Richland Hills. The homestead exemption (15% of the Market Value) on this property equals $29,993.10.  This is subtracted from the Market Value, making the property's Taxable Value $169,960.90.

When the homeowner turns 65, they can fill out an application through the Tarrant Appraisal District and receive the senior exemption. This is not in lieu of the 15%, but rather an addition.  If a home with the average Market Value of $199,954 has both the 15% Homestead and the $36,000 Senior Exemption on the property, the owner would receive total exemptions of $65.993.10 ($29,993.10 + $36,000). This reduces the property's Taxable Value to $133,960.90.
The $0.61 per $100 tax rate is applied to the Taxable Value of the property. In this example, the resident would pay $1,036.76 in city property tax if they have the homestead exemption or $817.16 in city property taxes if they have both the homestead and senior exemptions. 

To verify if you have the homestead and / or senior exemption in place, contact the Tarrant Appraisal District at 817-284-0024.

9.  How does my property tax bill break down? What taxing entities are included? What is each taxing entity’s portion of the total tax?

The North Richland Hills tax rate is only a portion of a property owner’s tax bill.  The 61 cent tax rate includes only the City of North Richland Hills and does not fund other taxing entities.  A property owner’s tax bill will include other taxing entities as well, depending on where the property is located.  The typical property owner in North Richland Hills will pay taxes to not just to the City, but to one of the two school districts that service the City, Tarrant County, the Tarrant County College District, and the Tarrant County Hospital District.  The following is a breakdown of the total tax rate for the typical property owner in North Richland Hills:

 Taxing Entity  Current Tax Rate  % of Total Tax Rate
 Birdville ISD* $1.453900 53.7%
 City of NRH $0.610000 22.5%
 Tarrant County $0.264000 9.8%
 Tarrant County Hospital District $0.227897 8.4%
 Tarrant County College $0.149500 5.5%
 Total  $2.705297 100%
* Some NRH residents pay Keller ISD taxes, rather than Birdville ISD. The Keller ISD tax rate is $1.54)

Based solely on the total tax rate, BISD accounts for 53.7% of the total tax bill, the County and its associated districts account for 23.7%, and the City accounts for 22.5%.  When the 15% Homestead Exemption, $36,000 Senior/Disabled Exemption and the Senior Tax Ceiling offered by the City are factored in, the tax dollars paid to North Richland Hills can be less than 22.5% of the total tax bill.

The North Richland Hills tax rate consists to two components.  The first is the maintenance and operations component.  The maintenance and operations portion of the tax rate is the largest source of revenue that funds operations within the General Fund.  The maintenance and operations tax rate is proposed at 34.8083 cents per $100 of valuation.  The second component of the tax rate is the Interest and Sinking rate.  Property tax generated by this portion of the tax rate is used to pay principal and interest on debt issued by the City.  The Interest and Sinking tax rate is proposed at 26.1917 cents per $100 of values.  These two rates, when combined, equal the total proposed tax rate of 61 cents.

10. What is the proposed property tax rate for the city for 2016? How long has this rate been in effect? Who authorized this tax rate?

The proposed tax rate for 2016 is 61 cents per $100 of valuation.  If adopted this will be the 5th consecutive year the tax rate has been set at 61 cents.  The City Council authorizes the tax rate through its adoption each year.  In 2012 the tax rate was increased 4 cents as a result of a voter approved bond election for the new City Hall.  This increased the tax rate from 57 cents to 61 cents, with the additional 4 cents being used to pay the principal and interest on debt issued by the City related to the new City Hall project.

11. How does the city spend property tax revenue?

North Richland Hills uses property tax revenue to fund operations within the General Fund. The General Fund is the City’s largest fund and accounts for activities traditionally associated services provided by city government.  Although there are other sources of revenue that fund General Fund operations, property tax is the largest source of revenue to this fund at 34%. Operations funded by the General Fund include Police, Fire, Emergency Management, Municipal Court, Public Works (Streets, Traffic Control), Library, Neighborhood Services (Animal Services, Code Compliance, Consumer Health), some of the Parks and Recreation operations along with other support departments (Budget, Finance, Human Resources, etc.).  In each of these areas, property tax is used to fund services, supplies, maintenance, equipment, and employee salaries and benefits. The graphs below show where revenue to the General Fund comes from along with how expenditures are allocated between service areas.

Revenue 2016

Expenditures 2016

12. What would be the result if the city's property tax rate were reduced:

Due to the City’s obligation to make principle and interest payments on debt issued by the City, any change to the tax rate would directly impact funding available for the many services provided by the City.  A 1-cent change in the tax rate would reduce the funding for General Fund operations by roughly $363,838.  The greater the reduction in available funding, the greater the impact to the quality and quantity of the services offered to the citizens of North Richland Hills.  

  • Reducing the property tax rate by 1 penny to $0.60 would mean $363,838 in less revenue for city services. 
  • Reducing the property tax rate by 2 cents to $0.59 would mean $727,676 in less revenue for city services
  • Reducing the property tax rate by 3 cents to $0.58 would mean $1,091,514 in less revenue for city services.
  • Reducing the property tax rate by 4 cents to $0.57 would mean $1,455,352 in less revenue for city services. 
It is important to note the impact of a change in the tax rate to the owner of a home of average value in North Richland Hills. For every penny the City property tax rate is reduced the owner of a home of average value in NRH ($151,000) would save about $15 per month or $180 per year. The owner of a home of average value in NRH pays about $925 a year in City taxes, that’s about $77 per month.

13. Some say that “After a 7% increase in property tax revenue in 2015, by maintaining the same property tax rate, NRH is set to increase its 2016 property tax revenue by 9.1% ($2,276,004); a 16.1% increase in only 2 years.” Is this true? Why or why not? What are the true facts related to this statement?

If North Richland Hills were to adopt a tax rate of 61 cents, total projected property tax revenue would increase 9.1% in comparison to 2015.  When broken into its components, the majority of the increase is directly related to debt service issued by the City.

   TY 15 Adopted  TY 16 Proposed  Change in $  Change in %
General Fund (M&O)   14,930,540  15,634,073  703,533  4.7%
 Debt Service (I&S)  8,391,108  9,674,703  1,283,595  15.3%
 TIF Debt Service  1,681,117  1,969,993  288,876  17.2%
 Total  25,002,765  27,278,769  2,276,004  9.1%

The total increase in projected tax revenue for 2015 was 2.41%; not 7% as has been claimed.  

   TY 14 Adopted  TY 15 Adopted  Change in $  Change in %
General Fund (M&O)  13,999,360   14,930,540  931,180  6.7%
 Debt Service (I&S) 8,840,000  8,391,108  (448,892)  -5.1%
 TIF Debt Service 1,575,953  1,681,117  105,164  6.7%
 Total 24,415,313  25,002,765 587,452  2.41%

A public notice that was posted in 2015 stated that tax revenue for maintenance and operations (M&O) would increase by 7%, however the notice only calculated the revenue from the maintenance and operations portion of the tax rate. It did not include the property tax revenue that goes to debt service, which is shown in the chart above. 

14. Will the city’s debt service increase each year? 

No, the current debt service is scheduled to decline as shown on this chart: 
General Debt Service

   TY 15 Adopted  TY 16 Prosed  Change in $  Change in %
General Fund (M&O)   14,930,540  15,634,073  703,533  4.7%
 Debt Service (I&S)  8,391,108  9,674,703  1,283,595  15.3%
 TIF Debt Service  1,681,117  1,969,993  288,876  17.2%
 Total  25,002,765  27,278,769  2,276,004  9.1%

   TY 15 Adopted  TY 16 Prosed  Change in $  Change in %
General Fund (M&O)   14,930,540  15,634,073  703,533  4.7%
 Debt Service (I&S)  8,391,108  9,674,703  1,283,595  15.3%
 TIF Debt Service  1,681,117  1,969,993  288,876  17.2%
 Total  25,002,765  27,278,769  2,276,004  9.1%