Midlothian City Council Approves New Tax Rate and Budget

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MIDLOTHIAN – The Midlothian City Council voted yes to all five regular agenda items at Tuesday night’s special meeting. All items were related to city finances including the passing of the 2023/2024 fiscal year budget and the city’s new fiscal year tax rate.

While the items all passed, three of the five did not pass without discussion, and one council member, Place 5 Ed Gardner expressed his concerns and voted no on all three items.

Gardner said no to an ordinance authorizing the issuance and sale of City of Midlothian, Texas, Tax Notes, Series 2023, in an aggregate principal amount not to exceed $5,000,000. He disagreed with approving the sale of the notes. Discussion was held on this item regarding what would be done with the money, and Councilmember Place 1 Allen Moorman asked if specific projects would be brought back for the council to approve before the money was spent.

Gardner said that while he was voting no on this item, it does not represent that he is not in favor of dealing with drainage issues, which this money would be earmarked for in the future.

It was also pointed out the city currently has about $7.8 million worth of drainage issues and only $1.8 million in the budget for the upcoming fiscal year.

In voting a lone “no” on the budget to adopt the FY 2023-2024 Annual Operating Budget and Plan for Municipal Services for the fiscal year beginning October 1, 2023, Gardner said it is a fact the city has grown, which necessitates the budget for the upcoming fiscal year. However, he said the city could have funded a lower tax rate. Gardner also said he disagreed with giving himself a raise on the City Council. He mentioned that perhaps the raises should have looked toward a future council in which the current council was determining the implementation of a pay increase.

The expenditures for the appropriated funds were approved as follows:

  • General Fund – $53,569,008 205
  • Utility Fund – $36,072,222 405
  • MidTowne PID – $81,400 419
  • Ellis County Radio Fund- $557,865 511
  • Citizen’s Center – $404,270 615
  • Type A (MED) – $6,265,348 625
  • Type B (MCDC) – $5,924,667 627
  • Conference Center – $697,697 965
  • Midlothian Development Authority (MDA) – $48,255,953

It was also noted at the top of the budget breakdown that the budget being presented is “based on the proposed tax rate of 0.650000. This budget will raise more total property taxes than last year’s budget by $6,389,757, which is a 17.04 percent increase from last year’s budget, and of that amount, $2,176,457 is tax revenue to be raised from new property added to the tax roll this year.”

Two speakers spoke at the public hearing regarding the FY 2023/2024 Operating budget. One of the speakers pointed out that $5.2 million of the 2022 budget was salaries, adding this was “top heavy.”

Midlothian Mayor Justin Coffman said, “It is normal for service organizations to pay salaries.”

Gardner said no to the vote to ratify a property tax revenue increase for the FY 2023-2024 Annual Operating Budget when compared to the FY 2022-2023 Annual Operating Budget, in which the budget will raise more total property taxes than last year’s budget by $6,389,757 as noted in the budget breakdown explanation.

The financial summary on this item specifically included an ad valorem tax rate of $0.650000 (M&O: $0.329455; I&S $0.320545) to generate $22,247,004 (at a 100% collection rate) for M&O and $21,645,341 for I&S, including amounts that are to be transferred to the TIRZ.

One point made was that there is an increase in existing property values as well as more property being added to the city overall justifying these numbers.

Three speakers spoke during the public hearing regarding the tax rate.

Resident Lisa Healey reminded council they were voted in to lower the tax rate and that the outcome they proposed ended up being just shy of what would have been the amount proposed to be brought to voters to decide.

January 1, 2024 Midlothian Will Have A 20% Homestead Exemption

Items that passed unanimously 6 – 0 with councilmember Place 6 Hud Hartson not in attendance was an ordinance amending the Code of Ordinances titled “Taxation” involving “Ad Valorem Taxes” and exemptions. The section titled “General Residence Homestead Exemption – Granted” was amended for the tax year beginning January 1, 2024, which will equal 20% of the appraised value of the residence homestead with a minimum exemption of $5,000.

Rodgers said 20% is the most allowed by the legislature, will give homesteaders a grand total of 50.8 cents.

Moorman pointed out that Waxahachie just passed a 1% Homestead exemption, City of Ennis offers 1% homestead, Red Oak is 10% and City of Ferris is 4%, so Midlothian is ahead of other cities. Even Ellis County only offers 1% homestead exemption.

Also passed was the final item levying and assessing municipal ad valorem taxes for the new fiscal year at $0.329455 for Maintenance and Operations and $0.320545 for Interest and Sinking Funds, for a total of $0.650000. The ordinance levies the FY 2023-2024 ad valorem tax rates necessary to fund the maintenance and operations (M&O) of the City and to pay principal and interest for the redemption of bonds (Interest & Sinking – I&S). The total assessed ad valorem tax rate, as established by this ordinance, will be $0.650000.

Staff notes pointed out “This rate represents no change from the current fiscal year’s overall tax rate of $0.650000.”

Gardner asked Midlothian City Manager Chris Dick what would happen if this item was not adopted. Dick said the city would have a deficit, so the entire difference in rates would come out of O&M.

Gardner closed with his thoughts before voting,saying he made a promise to council in favor of a no new revenue rate.