Staff: 2025 business personal-property exemption cut taxable value by about $46.7 million, shrinking revenue available for FY2027

City finance staff told the commission on Aug. 1 that a state law change (the 2025 proposition expanding business personal-property exemptions) has already reduced the city's taxable value and will continue to depress property-tax revenue in FY2027.

"So the effect of that is all businesses that have business related personal property, it could be computers, it could be a hotel with desks and tables and chairs," the finance presenter said, summarizing the statute's reach and noting the exemption became effective Jan. 1, 2026. Staff said 828 local businesses in the city of Ennis took the exemption, lowering the city's appraised taxable value by $46,731,485.

Staff applied the Truth in Taxation worksheet to the adjusted valuation and reported that, using the recommended no-new-revenue rate, property-tax revenue for the general fund is estimated at approximately $24,005,427. The presenter said the reduction in taxable value translated to an approximate one-time revenue shortfall on the order of $312,312 (as presented in the meeting), and that the shortfall effects will carry forward into subsequent years.

The finance official framed the policy trade-off: the exemption supports business growth while leaving municipalities without comparable state compensation. "The goal is very noble to allow businesses to grow and thrive, but then for municipalities specifically, there was no relief," the presenter said.

The commission was invited to consider staff's recommendation to adopt the no-new-revenue tax rate for the coming year; staff stressed that rate is still lower than last year's 0.6807. The presentation was procedural and informational: the commission did not take a final tax-rate vote at the meeting and staff said the proposed budget and required notices will be posted for the 30‑day public-review period before the commission considers adoption.