State appraisal recalculation cuts Lubbockno-new-revenue benchmark on paper, shrinking budget room

City Manager Jared Atkinson told the Lubbock City Council at a work session that a retroactive recalculation of property values by the Lubbock Central Appraisal District (LCAD) reduced the city's baseline taxable value by about $205 million and lowered the maintenance-and-operations levy on paper from roughly $83 million to about $81.1 million.

Atkinson said the adjustment stems from a change in how appraisal districts must apply exemptions retroactively and that the result is largely procedural: "This is largely a paper issue," he told the council, adding that "83 is real. You really did levy it and collect it." He said the change reduces the city's no-new-revenue (NNR) benchmark and therefore narrows the margin the council can use for any tax-rate increase before triggering voter-approval requirements.

Why it matters: The recalculation changes the denominator for the NNR comparison the council uses when deciding tax rates. Atkinson said the recalculation is applied backward to prior year values, which reduces the baseline levy against which the city measures whether it has raised taxes. On paper, that produces a $1.9 million difference in the general fund levy compared with the levy the council adopted and collected last year, even though the city actually collected the larger amount.

Atkinson walked the council through the mechanics and cited several figures: an adjusted taxable value previously shown as $23,232,000,000; a recalculated baseline of about $23,000,000,000 reflecting roughly a $205,000,000 reduction; the city's adopted M&O levy that produced just over $83,000,000 last year; and the recalculated M&O levy of about $81,100,000 under the new worksheet. He characterized the effect as mathematical and tied to how exemptions and tax freezes are now applied across the appraisal cycle.

Council reaction and next steps: Council members asked clarifying questions about the statutory change and its timing. Councilman Glasheen summarized Atkinson's explanation as a state-law change that retroactively lowers the baseline used to compute the NNR rate. Atkinson said the correction follows rules that were revised in 2021 and confirmed that the worksheet and its math have been checked with outside counsel and LCAD staff.

Several council members raised concerns about how the change will appear to the public. Councilmember Dr. Wilson said even a no-new-revenue adoption could be characterized as a tax increase in public notices because the recalculated baseline is lower. Councilmember Gushing recommended using the statutory language in public notices, reasoning that exemptions will shift tax burdens among property classes and that some owners will pay more even though the city is not collecting more revenue.

Timing and required filings: Atkinson said the proposed budget will be filed with the city secretary by the required deadline and that staff will ask the council to propose a maximum tax rate at the next meeting to keep the budget-adoption schedule on track. He said the maximum rate proposed next week will be the rate necessary to fund the budget the council was shown; the council will still have discretion to set the final rate below that maximum during adoption.

Revenue context and restraints: Atkinson also reviewed sales-tax receipts through June, reporting a June shortfall versus budget of about $1.3 million but noting actual year-over-year sales-tax receipts were down by roughly $200,000 for that month. He said staff will keep hiring freezes and other controls in place into October and that the proposed new budget remains tight; he asked the council for guidance on priorities and areas for possible reductions. Several council members emphasized protecting public safety spending while looking for lower-priority reductions elsewhere.

What was not decided: The council did not vote on a budget or tax rate in the work session. Atkinson said staff will return with the recommended maximum rate for publication and with additional clarifications about the public notice language and the exact dollar comparisons the city will present to residents.

Ending: Atkinson asked council members to provide any additional input before the next meeting and said staff will provide updated numbers and legal guidance for public notices before the formal budget-adoption steps.