The city of Frisco is considering a property tax rate increase because of declining property values.
The city's rate of 46.5 cents would rise to 47.76 cents under the proposed 2011 budget.
City Manager George Purefoy said the increase of 1.26 cents would go entirely toward paying debt and not be used for the city's maintenance and operations. The proposed increase amounts to an extra $31.50 a year for the owner of a home valued at $250,000.
Assistant City Manager Nell Lange said existing property values declined 4.3 percent, with much of that in the city's commercial sector.
A special fund that sets aside revenue from property taxes in a square mile around Stonebriar Centre mall for public projects, for example, lost about $60 million in value from last year, Lange said.
Council members received a brief summary of the budget proposal Wednesday and will get copies of the full budget Monday.
Public hearings on the budget are scheduled for Aug. 17 and Sept. 7.
Last year, the city manager's office proposed no property tax increase.
But council members decided 4-3 to increase the property tax rate by 1.5 cents to fill 17 key vacancies and take less from the city's savings.
Earlier this summer, Frisco ISD announced it would increase its property tax rate by 3 cents, pushing the overall tax rate to $1.42 per $100 assessed valuation for the next school year.
That represents a 2 percent jump, or about $75, for owners of a home valued at $250,000.
