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Council approves increase to city homestead exemption amid debate over reserves
Summary
After extended debate over fiscal trade-offs, council approved an ordinance amending the city homestead exemption (motion to increase from 3% to 5% was made and passed); staff confirmed senior/disabled homestead exemption is set at $15,000 in the proposed ordinance.
The City of The Colony approved an ordinance amending the homestead exemption in city code chapter 8 (homestead exemption provisions). Councilmembers debated whether to increase the general homestead exemption from the current 3% to higher levels (a motion to amend to 5% was offered and seconded).
Some councilmembers argued higher homestead exemptions offer property-tax relief that disproportionately benefits owner-occupied homes; others expressed concern about the city’s shrinking reserve balances and the potential impact on capital projects and public-safety funding. One councilmember noted reserves had declined from about $36 million in 2023 to a projected $18 million for the current year, and said that uncertainty argued for a more modest immediate change.
City staff confirmed existing senior and disabled homestead exemptions of $10,000 and indicated the proposed ordinance included a $15,000 exemption for that class (the draft ordinance presented to council already reflected that amount). After council discussion and votes, the motion passed and the ordinance was approved for placement in the record; council will submit required notifications to the appraisal district to affect next year’s tax roll.
