Each year, I find myself having to explain to Texans that in general, across a taxing district, average higher property value appraisals do not raise your property taxes; that is done solely by the votes of local government officials when they set a new property tax rate for their upcoming budget year.
Maybe one of the reasons local officials, along with cooperative or ignorant local media, find it so easy to mislead voters into thinking they, the local politicians, are not directly and solely responsible for raising property taxes is that much of the public thinks the State of Texas levies those taxes.
A May 2022 UT Tyler and Dallas Morning News poll asked Texans: “Who do you believe is responsible for high property taxes in Texas?” The answers were astonishing.
The largest cohort of those polled said “Governor Abbott and Texas legislators” are responsible. Forty percent of all respondents blamed the state government even though the State of Texas does not levy any property tax!
According to the poll, 60 percent of Democrats blamed the governor and state legislators; 34 percent of Independents did the same; and even 26 percent of Republicans blamed those who do not levy, set a tax rate for, or collect a property tax for “high property taxes in Texas”!
No wonder local elected officials who run cities, counties, school districts, and special districts local voters have created get away with claiming they are not raising property taxes, when so many people wrongly think such is done by legislators in Austin.
Whether you call it the effective tax rate or the no-new-revenue tax rate, Texans must remember that, in aggregate across a taxing district (school, city, county, etc.), higher property value appraisals do not raise property taxes. Tax increases are made solely by local government officials when they set a new tax rate each summer for their coming fiscal year.
Each year after new appraised values are set, each local government which levies a property tax must calculate and publish the no-new-revenue tax rate. That figure, which reflects appraisal changes, keeps their tax money take equal to the previous year’s take, in aggregate, over their taxing district from existing properties taxed in the previous year.
Last year’s tax rate, so often talked about in the context of raising or lowering it, is meaningless. For example, if your city’s appraised values on pre-existing property increased by 5 percent, the no-new-revenue or effective tax rate is lowered by about that amount to produce the same revenue from those same properties as was billed the year before.
When officials say they kept the “tax rate the same” as the year before, then it means they chose to raise your taxes (if there was an increase in appraised values). Understand that the previous year’s rate has no meaning in determining whether officials voted to increase or lower property taxes. The base numbers are completely reset each year after the annual round of appraisals.
Don’t be fooled. And, don’t be so ignorant as to think legislators and the state’s governor are directly responsible for your property taxes. Those taxes are levied solely at the local level with a new, fresh rate set each year by local elected officials who increase taxes when they decide they want more money from existing taxpayers than they took the previous year.
Only local votes to adopt the no-new-revenue tax rate, or one lower, is voting for no tax increase, and those decisions are made by the elected officials running your various local governments—not legislators in Austin.
You can see a collection of essays on how Texas property taxes work, as well as how often local officials outright lie about such, here.
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