Three years after state lawmakers passed property tax reform, local governments are still hitting Texas taxpayers with punishing property tax increases to pay for “wildly out of step” spending.
Starting in July, citizens will have a chance to speak on the latest round of tax-and-spend proposals put forward by local officials at city and county budget meetings.
To make their tax bills more affordable, Texans will have to convince officials to rein in spending.
Spending Drives Taxes
Most major city and county governments in the state spend “well beyond what the average taxpayer can afford,” according to a series of new research papers on local government spending by the Texas Public Policy Foundation.
As a result, says TPPF, over the last decade the typical Texas family has paid thousands of dollars in taxes above what the state considers a reasonable increase of population growth plus inflation.
“Major cities and counties in Texas are spending huge sums that are wildly out of step with what many taxpayers can afford to pay,” says TPPF’s Vance Ginn. “Our data should be a huge red flag that we are heading toward unsustainable spending growth and tax increases that kill jobs, punish families, and drive people and businesses out of the state.”
Senate Bill 2, the property tax reform passed in 2019, didn’t reduce how much cities and counties tax and spend—it simply limited the size of their annual increases.
What Citizens Can Do
One way citizens can try to limit the size of their property tax bills is by speaking up during—and before—city and county meetings on spending and taxes.
Budget planning workshops are usually held in July or August.
The public is not invited to speak, but they can attend and learn about proposed spending plans, then follow up with their elected officials about specific items before budgets and tax rates are finalized.
Some cities will also hold town hall meetings where the public can ask questions and give feedback on the budget.
Public hearings on final budgets and tax rates are usually held in September.
SB 2 reduced the number of public hearings a city or county is required to hold on a tax hike from two to one, and officials can adopt a tax increase at the same meeting as the public hearing—effectively disregarding anything citizens say at the hearing.
During last year’s budget season, savvy Allen citizens didn’t wait until the city’s September public hearing. Instead, they used time allotted for public comments during an August council meeting to explain why city officials should not raise taxes.
Even when a budget is already decided, it’s important for citizens to speak on the record. Otherwise, officials may assume the public fully supports all the proposed spending and taxes.
Taxpayers can also try to lower their property tax bills by protesting their appraisals, though the protest deadline for this year has passed. Appraisal notices are sent in April, and property owners have until May to protest the appraised values.
Local Elections Matter
Finally, the most important step for keeping property tax bills in check is electing fiscally responsible local officials who will control the spending that drives property taxes.
For example, after Allen voters elected three new conservative council members in 2021, the city adopted a budget that did not rely on increased property taxes for the first time in at least 10 years. Instead, Allen passed a spending plan based on the No New Revenue rate—the tax rate that collects the same overall revenue from properties taxed the previous year, keeping average homeowners’ tax bills stable.
Plano passed budgets based on the No New Revenue rate for three years in a row, after voters elected four pro-taxpayer city council members.
Collin County’s conservative commissioners court members have adopted the NNR multiple times in recent years, lowering the tax rate each year to offset rising property values.
Of course, these local governments still spend more each year because of additional revenue collected from new properties added to the tax rolls.
How Property Taxes Work
Cities and counties levy property taxes to spend on government operating expenses—police and fire departments, jails and courthouses, libraries, parks, and other public services—as well as to pay off voter-approved bond debt.
Property owners pay taxes on assessed (taxable) values, which are based on properties’ appraised values, less any exemptions.
Each taxing entity sets a property tax rate, based on known property values, that will raise the amount of money they want to spend for the year (along with sales taxes and other fees).
Unless city and county officials decide to spend less, Texas taxpayers will keep paying more.
TPPF notes the state has adopted a spending limit of population growth plus inflation.
“Now,” Ginn says, “it is time to rein in excessive government spending growth at the local level.”