Harris County officials are planning to raise residents’ property tax bills to the highest level allowed by law before voters would have an opportunity to approve or reject the increase.
Facing the prospect of an automatic election trigger for property tax revenue hikes above 3.5 percent year to year starting in 2020, the county is opting for a tax revenue increase this year of nearly 8 percent—the current “rollback” rate—joining a number of other taxing entities across the state engaging in last-chance tax grabs.
Harris County Commissioners Court voted this week to propose a property tax rate of $0.65260, just below the county’s rollback or “voter-approval” rate. For a $250,000 home, this rate will result in a tax bill of $1,632, or $102 more than last year’s bill.
Currently, when local taxing entities propose raising property tax revenues more than 8 percent from the previous year, voters can petition for a “rollback” election in which they can approve or reject the proposed tax increase. New legislation effective next year limits cities and counties of more than 30,000 residents to tax revenue increases of 3.5 percent, unless voters approve bigger hikes.
The proposed rate is well above the county’s “effective” tax rate—also known as the “no-new-revenue” rate—of $0.61170. The effective tax rate adjusts as property values change to keep taxpayers’ bills more or less the same from one year to the next, in the aggregate, though individual results vary based on valuations and exemptions.
Texas’ Truth in Taxation laws require taxing entities to calculate and publish their effective rate each year to ensure the public is informed of any property tax increases. Year-over-year rate comparisons are meaningless as they don’t account for changing property values.
Senator Paul Bettencourt (R–Houston), the author of Senate Bill 2, which imposes the lower tax revenue limit and requires an election to approve a rate exceeding it, released a statement Thursday criticizing the proposed tax increase.
“This is a ‘maximum smash’ on taxpayers the last year before Senate Bill 2 takes effect in 2020, reducing the rollback rate from 8 percent to 3.5 percent,” said Bettencourt. “The key point is that such an onerous tax increase next year would require commissioners court to take it to the voters for ratification in November.”
Because commissioners are proposing a tax rate higher than the effective rate, the county must hold public hearings on the matter. These hearings are scheduled for September 20 at 1 p.m. and during commissioners court meetings on September 24 and October 8. After the last hearing, county officials will adopt a final property tax rate.
The effective and rollback rates were provided to the commissioners court in a letter from the county budget officer, which can be viewed here.
This article has been updated since its publication to include an official statement.