Finance director recommends delaying tax-supported bond intent until late March amid falling use-tax receipts; council receives update

Taylor’s finance director presented a 2025 debt-schedule update on Jan. 9 and recommended the council delay approval of an intent-to-issue resolution for tax-supported debt until late March and to adopt an “up to” amount rather than a fixed issuance.

Jeff Wood (finance director) told council that sales and use tax receipts are trending lower than budgeted — the city has seen use-tax receipts fall substantially in recent months — and that reduced use tax will push more of the revenue burden onto property taxes. Wood said the Williamson County Appraisal District’s preliminary read suggests property valuations may be flat for the year, but uncapping of previously taxed properties should still produce roughly a 4% assessed‑value increase even if values are flat.

Wood described six scenarios comparing different assumptions about taxable value growth, use‑tax trends and issuance size (for example, $20 million or $8 million). He said the combination of lower use-tax receipts and existing calculations could drive the city’s maintenance and operations (M&O) tax rate from about 31¢ to roughly 41¢ in certain scenarios — an increase of about 10¢ — and that the I&S (debt-service) rate would also move depending on the amount of new debt issued. He noted that even without new tax-supported debt this year, I&S could rise a few cents based on existing obligations.

Wood reported the city has banked about $8.7 million in a reserve set aside from use-tax receipts to smooth the transition while franchise-fee revenues from Samsung are expected to arrive in a few years. He advised waiting to get additional months of sales/use-tax data (late March/early April) and preliminary valuation numbers before publishing intent and moving forward with bond counsel and the financial advisor for an issuance that could close in July if needed.

Council members praised the presentation and the city’s prior planning to set aside reserves. The council voted to receive the 2025 debt-schedule update as presented.