Despite Texas already having the fifth highest property tax rates in the nation, the problem is only getting worse. Unless local officials lower tax rates to offset appraisal shock, taxpayers should expect higher taxes again next year.
According to the Texas Comptroller, property tax levies from cities and counties are rising two to three times faster than median household income, respectively.
This means that each year, taxpayers are paying a much higher percentage of their income to local governments. And while often under-reported, higher taxes hit low-income families and struggling businesses the hardest.
Reformers such as State Sens. Paul Bettencourt (R-Houston) and Van Taylor (R-Plano) have pledged to empower voters by allowing them to vote on excessive tax hikes. Under current law, local officials can raise taxes as high as they want without seeking local voter approval.
But local government interest groups such as the Texas Municipal League are a powerful lobby. With the aid of officials such as the Mayors of Plano and Dallas, they use half-truths and falsehoods to malign reform efforts.
Their opposition to voter empowerment exposes their “local control” rhetoric for what it is—hypocrisy. But even worse, many local officials have also worked to distort the fact that they are ultimately to blame for property tax hikes.
While property appraisals in the Metroplex, Houston, and Austin are up 10-25 percent in 2016, local officials could lower rates to offset rising land values. But most of them do not, hence the massive growth in tax levies statewide.
Each summer, county tax assessors report appraisal growth to localities prior to officials setting next year’s tax rates. Local officials are given their “effective tax rate”—the rate they could charge in order to collect the same amount of money from the very same taxpayers.
Very rarely do any vote to adopt the effective rate. Instead, they often vote to keep tax rates the same—or only reduce them slightly—which effectively raises taxes. Over the course of five years, these incremental increases can increase a landowner’s tax bill by more than 50 percent!
City, county, and school officials have the option of lowering tax rates to offset rising appraisals. Those who fail to do so are making the conscious decision every year to raise taxes.
While contesting your appraisal value does matter, taxpayers should assign blame to those ultimately responsible for property tax increases—local officials. With nearly 90 percent of voters skipping May’s local elections, they often avoid both the accountability and scrutiny they deserve.