The certified tax rate statutes are also referred to as the Truth in Taxation Statutes. These are the statutes that require the city and county legislative bodies to rollback the tax rates following a reappraisal of property in order to generate the same revenue as was received in the year before the reappraisal. The purpose is that the local governments will not benefit from a windfall in revenue from property value increases. This action forces the local governments to actually increase tax rates if more revenue is needed and it makes sure the public is aware of the rate increases. Otherwise, the governments would sometimes benefit from enormous increases in revenues without even touching the tax rates.
In practice, the Assessor of Property furnishes the local governments with the total valuation of all properties and using this total, the governments must compute a tax rate which will generate the same revenue as was received in the prior year. The governments are permitted some adjustments such as a deduction from the increase in valuations for the amount of new construction value. The new construction value increase would have been received by the government even if there were no reappraisal program completed. In addition, the governments may deduct from the amount of reappraisal generated an estimate of losses in value anticipated from appeals and protests by taxpayers.
The final Certified Rate must be approved by the State Board of Equalization.
The local government may in a public hearing vote a tax rate exceeding the Certified Rate; however, the proposed rate must first be advertised and within thirty (30) days the State Board of Equalization notified of the publication.
