Since local government officials across the state are on a full-court press to prevent passage of property tax appraisal reform legislation, I think it important to press back.
What is being claimed by either ignorant or dishonest city and county officials across Texas is shameful for its lack of truth. SB156 by Senator Nichols does absolutely nothing to take away so-called local control. Tax law and parameters are already state matters and Nichols’ bill simply lowers the already existing ten percent cap on how much a residential homestead’s appraised value can increase for taxing purposes in a year to five percent.
This is a protection against overly rapid growth on the tax-valuation on your homestead property during boom times where such can easily double in just a few years of large increases. It does NOT however, and this seems hard for many to understand, cap the amount of taxes you could end up paying.
The appraising entity, usually an appraisal district, doesn’t levy a tax rate, it sets appraised values. The various member government entities such as counties, hospital districts, cities, etc. set tax rates annually after determining the revenue-neutral Effective Rate. The Effective Rate is the amount at which the entity gets the same revenue as the year before taking into account all appraisal changes including all caps on increases.
There is nothing in Nichols’ bill which restricts local governments from setting the property tax rate to whatever level is claimed to be necessary. And this is what they don’t like about a lower cap on appraised value growth: It could further lower the amount of automatic income growth these entities have been enjoying from the upward creep of appraisals which might, in turn, require them to vote on a clear increase in the tax rate – something the cowardly-elected don’t want to do.
Nothing SB156 reduces or changes local control, it just makes it slightly harder to hide growth in government spending during a booming property market. Local officials need to increase their understanding and decrease their prevaricating.
See more here: Nichols’ & Bettencourt’s tax bills empower taxpayers