Taxation & Debt Survey

The Texas Municipal League’s (TML) annual survey of municipal tax and debt for past years are posted here. If you have difficulty accessing this information, please call Rachael Pitts in the TML office at 512-231-7400.

The following information may be helpful when you review the survey results.

Limitations on Municipal Tax Rates

Municipal property tax rates are limited by the Texas Constitution (Article XI, Sections 4 and 5) and state law. Municipal tax rate ceilings are as follows:

  • Cities of 5,000 or less in population can levy a maximum tax rate of $1.50 per $100 assessed valuation.
  • Cities over 5,000 in population can levy up to $2.50 per $100 assessed valuation (for a home rule city, a rate lower than $2.50 per $100 may be prescribed under its charter).
  • Type B general law cities can levy a maximum of $0.25 cents per $100 assessed valuation.

Results

View the Tax and Debt Survey Results.

  1. Definitions of Terms Used
  2. Key

Definitions of Terms Used in the Survey

General obligation bonds are bonds that are secured by a pledge of the full faith and credit and the taxing power of the issuers. The term is synonymous with the term “tax-supported.”

Revenue bonds are special obligations of the issuer (as opposed to general obligations) that are payable solely from the revenues derived from an income-producing facility. Revenue bonds are sometimes further secured by a first mortgage on the physical plant or property whose revenues are pledged. Such bonds are called “first mortgage revenue bonds.”

Certificates of obligation are a financing mechanism a city may use to pay a contractual obligation incurred in: 

  1. A construction contract
  2. The purchase of materials, supplies, equipment, machinery, buildings, land, and rights-of-way for authorized needs and purposes
  3. The payment of professional services, including services provided by tax appraisers, engineers, architects, attorneys, map makers, auditors, financial advisors, and fiscal agents

Tax notes (also called an “anticipation notes”) are a debt instrument that a city may sell to finance the construction of public works, the purchase of supplies, land, and rights of way for public works, to pay for professional services, to pay operating expenses, or to pay off cash flow deficits. Tax notes used to pay for public works or professional services must mature before the seventh anniversary after the notes are approved by the attorney general. Tax notes used to pay operating expenses or to fund a city’s cumulative cash flow deficit must mature before the first anniversary after the notes are approved by the attorney general.

Tax rate is the rate at which taxes are levied per $100 of assessed valuation. In Texas, the ad valorem tax rate for local governments is expressed in terms of dollars or cents per $100 of assessed valuation.