Erath County Commissioners approved the 2011 proposed tax rate Monday morning at 45 cents per $100 of valuation.
The rate, which is divided into two sections including the general fund rate weighing in at 33.25 cents and the lateral road and bridge rate weighing in at 11.75 cents, is six cents higher than 2010's rate.
The general fund also includes the indigent healthcare rate, which is .0244 and the debt rate of .0273.
The debt rate is returning to Erath County taxpayers after several years of leave because the county is renovating and expanding its jail, which was originally built in the 1980s.
"The (county) has not had a debt service since the courthouse renovation and the jail was originally built," Tax Assessor/Collector Jennifer Carey said.
County Auditor James Young said the proposed rate is calculated by placing $200,000 from reserves into the debt service and another $550,000 from reserves into the fund balance.
"By doing that, we can fund the budget at 45 cents total per $100 of valuation," Young said.
While the process removes a total of $750,000 from reserves, the amount is down from last year's $1.6 million out of the reserves.
"Nearly $1 million bucks off (of what is removed from reserves) is a big deal," Young told commissioners.
Another $6.8 million that has been allocated for the jail expansion project will also be used in the next year, while the remaining funds will be supplied through a 15-year note.
"We were able to lock in a 3.8 percent rate for 15 years to build the jail," Young said.
Young estimated that the annual payments for the debt on the jail would be $476,000, but that the price would dwindle annually.
"Each year the principal and interest will go down and the debt service payment will go down each year, easing the burden on taxpayers year after year," Young said.
While a portion of the proposed tax rate can be attributed to the upcoming debt service for the jail project, Carey said another large factor in the calculation was the decrease in property values.
"Typically on an effective tax rate (property) values go up and tax rates go down," Carey said. "Each year they value oil and gas reserves in the soil (on properties) and what they think they will be able to produce. But because of rising gas prices, the value of minerals across the state has dropped."
The drop in mineral values is the cause of decreasing property values, Carey said, which resulted in an increase in the annual tax rate.
"This is probably as bad economic conditions as we have seen in Erath County in a long, long time," County Judge Tab Thompson said. "We've got a great rate. We are maintaining all of our employees and services pretty well with the job the commissioners have done."