Harris County’s Chief Budget Officer was in Austin this week testifying against Senate Bill 2 – a proposal that would let Texans vote on property tax hikes – on behalf of the commissioners court.
Harris County residents living within the City of Houston have their city property taxes capped at 4.5 percent or the combined rate of population and inflation. This means that though their property values continue to increase, their city property tax rate often drops to offset the rising values.
Taxpayers living in unincorporated Harris County, on the other hand, have no respite from the ever-increasing appraisals, even though the county has maintained the same tax rate for a number of years. If property values rise, and tax rates remain the same, those homeowners will pay higher tax bills.
Bill Jackson, who has served as Harris County’s top budget officer for seven years, showed up to testify specifically against the 2.5 percent tax increase limit that is in Senate Bill 2 and House Bill 2. If passed, the law would prohibit many cities, counties, school districts and other taxing entities from increasing property tax levies above 2.5 percent without an approval from the voters.
It’s important to note that taxing entities subject to the limit would still get additional property tax revenue from growth and economic redevelopment, on top of a 2.5 percent tax hike on existing properties.
Jackson noted that if unincorporated Harris County – with its millions of residents – were its own city it would be the fifth largest in the country, leading to unique problems for the county which generally has no ordinance-making authority and does not collect general sales taxes.
“We’re about ready to be larger than the City of Houston…last 7 years, 700,000 people have moved to Harris County and of that, 70 percent of them moved to the unincorporated area,” he said. “So we had to build the infrastructure for cities like Boston, Denver, Atlanta, and Seattle in seven years.”
That new growth allowed a significant increase in property tax revenue despite the county not increasing its tax rate. The county saw a 40 percent increase – or $500 million – in just the four-year span from 2013 to 2017.
“Harris County probably the largest increase that we’ve got on the books,” bill author State Sen. Paul Bettencourt (R-Houston) said.
“37 percent increase in the average tax bill in four years. Schools, city, county, special districts. The average employee in Harris County can’t keep up with that, so we’ve got to lower the rollback rate, we have to control this.”
When Bettencourt pressed Jackson as to what percentage for a tax increase limit would be sufficient for the county, Jack said 5 percent.
“Remember this, you get all that new [tax revenue from] growth, which is unbelievable. Bill, you are number one. 40 percent increase for the major counties, you beat Bexar County, you beat everybody,” said Bettencourt.
While, comparatively, Harris County has been better on property taxes than other large counties in Texas, that doesn’t do much to reassure the homeowner who has watched as their total bills have increased 37 percent in recent years.
While the county government has long maintained the same tax rate, they have not taken the opportunity to reduce the rate to offset the constantly increasing appraisals. As a result, taxpayers are paying dramatically higher county tax bills simply because their homes have increased in value.