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unitary system as possible. The only variable now is the tax rate of each overlapping entity. Theoretically, the taxpayer can make a valid compari- son of the value of each tax dollar paid, compared to the services received, since each entity is now on equal footing. The only issue now is the comparison of the property tax revenues each entity received in the prior year with what it is going to receive in the current year. Again, since we are only dealing from the perspective of cities, we will not delve into the variety of issues facing school districts, the transfer of tax revenues, or the influence of other state-man- dated funding formulas. Nor, since this is a general review, will we dis- cuss the sales tax substitution options available to certain entities. History has shown us that even with these additional disclosure requirements, citizen involvement and influence in the tax rate-setting process have not changed signifi- cantly since the passage of TNT. In 1997, a study published by Dr. Robert Blaud of the University of North Texas Department of Public Administration concluded that: "Based on the findings of this study using data for a 12-year period for 93 Texas cities, real per household property tax burdens were unaffect- ed by the i,,mplementation of truth~ in taxation. Dr. Bland went on point out "that if full disclosure is working as intended, then on the whole citizens in Texas have accept- ed an increased property tax burden in exchange for greater political accountability in the rate adoption It seems clear that while a dti- zen-involvement mechanism is in place, the taxpayer generally is still either uninformed or disinterested in the process of adopting a local tax rate, and only in circumstances of high controversy is there any more citizen involvement in the whole budgetary process than that existing prior to the passage of TNT. The Effective Tax Rate The terms "effective" and "rollback" tax rates were coined to indicate the two ends of a value continuum cre- ated in TNT. Each one has its own equation, and each one means a dif- ferent threshold in the process. According to the comptroller, "(t)he effective tax rate is generally the prior year's taxes [levy] divided by the current year's taxable values of properties that were on the tax roll in both years. The effective tax rate excludes taxes on properties no longer in the taxing unit and also excludes the current taxable value of new properties." [See the simplified version in the table below.] The effective rate also assumes that the taxing entity is immune from the effects of inflation and that con- sumer product inflation and property value inflation are synonymous. The Notification Rate While this term may not be found anywhere in the statutes or regula- tions pertaining to TNT, it has become a political reality, a barrier against which taxing entities "hold their own." As noted earlier, many taxing units decide to set a tax rate that falls just under the property tax rate that requires public notification and public hearings. Presently, that threshold is three percent over the effective rate. In our example, below, any rate over $0.18727 (the $0.1818 on Line 5 times 103 percent) would require additional disclosure as specifically outlined in the statutes, The three-percent margin attempted to address the effect of inflation on costs. However, many taxing jurisdic- tions have interpreted it more as an "allowance" for increased spending. The effort to ensure absolute, full disclosure gained so much momentum that, for the 1998 tax year, the legislature adopted a signif- icant amendment requiring cities to publish notices and hold public hearings if the proposed tax rate generated ANY additional increase in total property tax revenues. This amendment did not aJlow for exclu- sions of new properties or other adjustments in the base year. This 1. Prior Year Tax Levy $1,000,000 2. Prior Year Net Taxable Values $500,000,000 3.Tax Rate per $100 (#1/#2) $0.2000 4. Current Year Taxable Values (an in~rease of 10%) $$50,000,000 5. Effective Tax Rate (#1/#4) $0.1818 Note that the ef~cti',~ tax rate for the current year is lower,due to the increased taxabFe values of the same properties, not any that were removed or added to the t~× rolls.