Frisco Proposes First Property Tax Rate Hike in Decades

Frisco homeowners could soon see an increase in their property tax bills as city leaders consider the first tax rate hike in over twenty years to fund voter-approved bond projects and rising operational costs. While Frisco has long been celebrated for maintaining or lowering its tax rate amid explosive growth, inflation and massive infrastructure demands are finally catching up to the city’s budget. This potential shift marks a significant turning point for North Texas taxpayers who have enjoyed decades of steady local rates.

Why Frisco is Facing a Tax Hike

For more than two decades, Frisco has managed a remarkable feat: keeping its municipal property tax rate flat or actively reducing it, even as the population ballooned from a small suburb into a major economic hub of over 220,000 residents. This steady tax climate was largely sustained by a continuous influx of commercial development, corporate relocations, and rising residential property values. However, the financial landscape is shifting, and city administrators warn that maintaining the current rate is no longer sustainable if Frisco wants to deliver on its long-term promises.

The primary driver behind the proposed rate increase is the city’s need to service debt from voter-approved bond packages, most notably the massive $473 million bond package approved by residents in 2023. These funds are designated for critical infrastructure, including road expansions, public safety facilities, park developments, and the construction of a new grand library. While voters approved the authority to issue these bonds, the city must now secure the revenue to pay back that debt, which historically requires a dedicated portion of the property tax rate.

Breaking Down the Proposed Numbers

The proposed adjustment would increase the interest and sinking portion of the tax rate, which is specifically used to pay off debt for capital projects. The maintenance and operations portion of the rate, which funds daily city services like police patrol, fire response, and library operations, also faces upward pressure due to inflation and competitive labor market demands for municipal employees. Even with the proposed hike, Frisco’s overall rate remains highly competitive with neighboring North Texas municipalities.

What This Means for Your Wallet

For the average Frisco homeowner, the financial impact will be felt as a combination of the rate hike and ongoing appraisal increases. With the median home value in Frisco now exceeding $600,000, even a minor rate adjustment can translate to hundreds of dollars in additional annual taxes. Homeowners who qualify for the 10 percent homestead exemption cap will see some protection from dramatic spikes, but those without exemptions or those owning commercial properties will bear the full brunt of the adjustment.

Key Implications for North Texas Growth

This budget debate highlights a broader challenge facing the entire Dallas-Fort Worth metroplex. As suburban communities mature, the cost of maintaining existing infrastructure starts to rival the cost of building new projects. Frisco is transitioning from a rapidly growing raw-land suburb to a mature city with aging roads, water systems, and public facilities that require ongoing reinvestment. This tax proposal serves as a bellwether for other North Texas suburbs that may soon face similar fiscal realities.

What to Watch Next

The budget process will unfold over the coming weeks, providing multiple opportunities for public feedback. Frisco City Council will host public hearings throughout August and September to discuss the proposed budget and tax rate before taking a final vote. Local residents who want to voice their opinions should monitor the city council meeting agendas and prepare to attend the public comment sessions. If approved, the new tax rate will take effect for the upcoming fiscal year beginning October 1.

• When was the last time Frisco raised its property tax rate?
  Frisco has not approved an overall property tax rate increase in over twenty years, consistently lowering or holding the rate steady since the late 1990s.
• How will this tax rate hike affect my monthly mortgage payment?
  For a home valued at $600,000, an estimated rate increase of one to two cents per $100 of valuation would add approximately $60 to $120 annually, which is typically split across your monthly escrow payments.
• Can residents vote directly on this tax rate change?
  No, residents do not vote directly on the tax rate. While voters approved the underlying bond projects, the City Council is legally responsible for setting the tax rate required to fund those projects.
• Does Frisco offer any tax relief for seniors or disabled residents?
  Yes, Frisco provides a senior tax ceiling (over-65 freeze) and a disabled person exemption, which lock in the city portion of property taxes so they do not increase even if rates or valuations rise.

To protect your household from rising tax liabilities, make sure you have filed your residential homestead exemption with either the Collin Central Appraisal District or Denton Central Appraisal District to cap your annual valuation increases at 10 percent.

Frisco Proposes First Property Tax Hike In Decades