window.dataLayer = window.dataLayer || []; function gtag(){dataLayer.push(arguments);} gtag('js', new Date()); gtag('config', 'UA-29484371-30');
Wednesday , March 20 2019
Bordertown Undergroun Show 728
Utep_DEC_728
STEP 728
EPHP Spring Training
shark 728×90
JustLikeThat728
Amy’s Ambassadorship
Home | Tag Archives: texas property taxes

Tag Archives: texas property taxes

How do Texas governments calculate your property taxes? Here’s a primer.

As Texas’ population boom fuels demand for more housing, the property values that drive tax bills are also rising. State lawmakers this legislative session want to slow the increase in property taxes that Texans pay each year — something they’ve been trying to do for years with little success.

That’s because property taxes are a huge revenue stream for local governments, whose officials say limiting their tax collection authority could hamstring what they budget for first responders, roads and other essential services.

Simply determining how much a Texas property owner owes in taxes is a complicated process involving multiple government entities — mainly cities, counties and school districts — and the final tax bite is largely determined by the appraised value of a property set by a local appraisal district.

As legislators prepare to spend the next several months debating how to keep property taxes from rising so fast, here’s a look at the process that determines how much property taxes Texas landowners owe their local governments each year.

 

Note: Because the appeal process can be expensive and involve attorneys’ fees, most property owners going this route are businesses.

Source: Texas Tribune research

Coming Thursday: A look at how local governments’ revenues determine tax rates.

Authors:  BRANDON FORMBYCHRIS ESSIG AND BEN HASSON  – The Texas Tribune

The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.

MORE IN THIS SERIES 

Analysis: Here’s your property tax cut, maybe. Heads up — it’s expensive.

Willing to give up some sales tax exemptions to pay for a cut in your local property taxes?

That proposition, from state Rep. Drew Springer, R-Muenster, is the first serious stab at a property tax cut in the current Texas legislative session.

Lawmakers in the House and Senate are already working on legislation designed to slow the growth of property taxes. But those bills, pushed by the governor, lieutenant governor and speaker of the House, wouldn’t lower existing taxes; instead, they would require voter approval for tax revenue increases of more than 2.5 percent.

Springer wants cuts. But it would cost a small fortune, more than $6 billion a year, and he’s a Republican, and he certainly doesn’t want to try to persuade a conservative Legislature to raise taxes. He wouldn’t actually cut them, either: He’s proposing a swap, cutting local school property taxes by getting rid of some popular exemptions to state taxes.

Springer wants to raise $6.4 billion a year, mostly by getting rid of sales tax exemptions and rules that are in current law. The list has some darlings on it — popular exemptions that might be hard sells in the Legislature and in lawmakers’ districts. Springer would tax sales of motor fuel, on top of existing gasoline taxes; over-the-counter and nonprescription drugs; “non-nutritional” foods, like potato chips, coffee and tea; newspapers and magazines; cuts and stylings at beauty and barber shops; and auto maintenance and repair. The proposal would also end things like prompt payment discounts for retailers remitting sales taxes and the loophole for hybrid and electric vehicle registrations.

Each of those things has a constituency: sometimes a mob of people who’d be affected, sometimes a small group of powerful people who would lose a business advantage.

Previous runs at sales tax exemptions have fallen to pieces under resistance from taxpayers — or, to be more precise, nontaxpayers — who benefit.

But with his other hand, Springer is offering prizes for property taxpayers. Springer says he would give a 50-percent homestead exemption on school property taxes, exempt retail inventories from property taxes and use the balance to “compress” school property taxes by 10 cents — or to 90 cents per $100 property valuation, whichever is higher.

His legislation hasn’t been filed yet, but Springer says the average Texas homeowner’s property taxes would be cut by $1,400. This is a good time to remember the last time state lawmakers spent a bunch of money and promised big cuts in property taxes. The savings promised by then-Gov. Rick Perry in 2006 was $2,000 per homeowner. It didn’t work out to be anywhere in that vicinity when the accounting was all in, and that experience has made some lawmakers skittish about promising property tax relief.

Springer apparently isn’t one of those. He also says his idea would lower the number of districts that pay locally raised property tax money to the state — a system called “recapture” by the education experts and “Robin Hood” in most political town-hall meetings. He also projects that the state would carry a bigger load of public education spending than locals as a result.

If this was a commercial for a new prescription drug, it would have to carry some fine print at the bottom. Something like this:

May cause commercial and industrial property owners who don’t receive the full benefits to revolt, or throw up, or throw up and then revolt; depression among renters who might see no benefits at all in return for their higher sales taxes; a sudden descent on the Texas Capitol by car dealers, auto shop owners, and people with scissors and hair dyes; angst among car owners paying a sales tax on top of a gasoline tax when they fill up; and tears to the eyes of the kids who grab a bag of chips on the way home from school every day.

The plan could ease the pain of property taxpayers. The question is whether this — or other proposals like it that might be in the works — are worth the new pains they cause.

The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.

MORE IN THIS SERIES 

Author: ROSS RAMSEY – The Texas Tribune

Analysis: Property taxes in Texas are high. Don’t expect the Legislature to change that.

Restrain, reform, rein in, restrict and limit are not synonyms for the word Texas property taxpayers crave: cut.

This is an alert: Your property taxes will not be falling, in spite of all the talk about easing property taxes that is emanating from the Texas Capitol.

State lawmakers can’t make property tax rates come down. They’ve tried. It didn’t make rates come down. And even trying is expensive: It would cost the state just under $2.5 billion to replace a dime’s worth of local school property taxes; that is, to lower the property tax rate by ten cents. On a $250,000 home, that would amount to overall savings of about $20 per month in property taxes.

But the state of Texas doesn’t levy property taxes — that’s the job of local governments. And it has proved to be impossible for state lawmakers to lower taxes they don’t control.

They can try to create conditions that could lower property taxes, increasing the state’s share of the costs of big programs like public education, public health, criminal justice and mental health. But because they don’t control either the appraisals of real estate or the tax rates imposed on those properties, Texas state lawmakers cannot guarantee a cut in your property taxes.

They hear a lot about it in town hall meetings and campaign visits, though, so you can’t blame them for trying.

The best recent example was in 2006, when then-Gov. Rick Perry and the Legislature embarked on an ambitious rebalancing of public school finance that included what was supposed to be a swap that raised state taxes on corporations in return for lower local school property taxes.

The swap amounted to a $7 billion reduction in what Texans would have paid without it, the Texas Taxpayers and Research Association, a business trade group, said at the time. But taxes didn’t drop. And Perry’s explicit promise that the average homeowner would save $2,000 came back to bite him during the 2006 race for governor.

Then-Texas Comptroller Carole Keeton Strayhorn, a Republican running for governor as an independent, ran a commercial that started with Perry’s ad running on a TV set. The script:

Perry: “We kept our promises to you. The average homeowner will receive a $2,000 tax cut.”

Strayhorn: “Have you gotten your $2,000 property tax cut yet? Don’t go running to your mailbox. Turns out, most seniors get nothing. And the rest of us? Just about $52. About enough each week to buy a can of soda. We need a government that talks straight with Texans and gives us real property tax relief. And real honesty. This grandma wants to shake Austin up.”

You might be surprised at the number of Texas officeholders — those who were in office at the time and those who came in later — who still remember that commercial. It has become an important bit of the current political folklore, passed from one generation of politicians to the next.

And that cautionary tale is baked into the current conversation about property taxes. Two years ago, Texas lawmakers failed to pass limits on the size of property tax increases that could be enacted without voter approval. The state doesn’t have a property tax — the Texas Constitution prohibits it. So the logic was to allow cities and counties and special districts to impose large increases only if voters said so. The legislation fell apart over where the limit should fall; the House said 6 percent, the Senate went for 4 percent, the governor came in with a late proposal for 2.5 percent.

They’re back with the same idea, more or less, paired with the kind of higher spending on public education that would make it possible for some school districts — maybe — to lower their own property taxes without making budget cuts in schools.

“Maybe” is not a word used in airtight promises.

A perceptible change in school finance — one that taxpayers could actually feel — would cost the state an enormous amount of money. And, as in 2006, the state can’t guarantee that taxpayers would actually receive the intended benefits.

So lawmakers have resorted to words that don’t rhyme with “cuts” when they’re talking property taxes. Maybe they can limit the size of future increases. That would give them something to talk about, and voters might appreciate the work.

But it won’t lower the high property taxes voters are complaining about that. And if they don’t see relief, neither will the politicians.

Author: ROSS RAMSEYThe Texas Tribune

Analysis: “Tax relief,” Maybe, but no Savings for Taxpayers

State officials are talking once again about your property taxes. Like you, they hate those taxes. A lot.

But they’re hoping to fool you, once again, into thinking they are going to lower the price of local government and public education.

None of their proposals or their recent actions would do that.

School property taxes are the biggest part of every Texas property owners’ tax bill. They are also the only local property tax that goes up and down primarily because of what happens in Austin.

State officials don’t set your school property tax rate; they just decide how much money local officials are required to raise.

In practice, it amounts to almost the same thing.

If the state spends less money per student, the local districts have to spend more. They get their money from property taxes, so property taxes go up.

And then, state officials complain — alongside property taxpayers across Texas — about rising property taxes.

The current long slide in state funding started in 2007 — right after lawmakers rejiggered the formulas and balanced state and local funding, with each covering 45 percent of the total cost of education and the federal government picking up the remaining 10 percent.

The numbers ten years later: Locals pay 52 percent, the state pays 38 percent and the feds are still at 10 percent.

According to the Texas Supreme Court about a year ago, local property taxes and the system they finance remain constitutional. Lucky for the state that’s not a criminal court, though: Taxpayers clearly feel robbed.

State officials can feel the heat of that ire. But their new budget doesn’t address the school finance problem. They killed legislation that would have put another $1.5 billion into public education — the only bill in the regular session that would have moved school taxes, if only indirectly and only a little bit.

And their effort to limit growth in property taxes levied by other local governments failed, too. Gov. Greg Abbott has said he will put that one taxesTxon the agenda of the midsummer special session. One version, passed by the Senate and apparently favored by the governor, would have required voter approval for any local property tax increases of more than 5 percent.

It wouldn’t save you any money — contrary to the rhetoric billowing from the Senate — but it could lower the speed at which your property taxes grow. It’s like promising a gazelle you can make the lions a little slower.

Texas lawmakers have replaced the idea of lowering state taxes with a new one: Complaining alongside taxpayers who want lower taxes. Actually doing something about it has remained out of reach.

They could replace an unpopular tax with a less unpopular one, but they have few options — none of them particularly lucrative. The Texas Lottery was an example of this, and it served mainly to underscore our widespread innumeracy: A surprising number of Texans thought state-run gaming would cover the full cost of public education in Texas. In fact, the Texas games earn the state about $2.5 billion very two years, about as much as taxes on alcoholic beverages and less than half as much as the (also) unpopular business franchise tax. Lawmakers budgeted $41 billion for public education over the next two years; the lottery will cover about 6 percent of that.

They could cut spending, except it has proven nearly impossible to do that in Texas, partly because the state budget is, relatively speaking, pretty tight, and partly because when you get down to it, the programs that would be cut are more popular than the tax cuts that might result.

People want roads and schools and prisons and whatnot, and the political experts who run the government — give them their due for getting into and then remaining in office — have ascertained that it’s more rewarding to keep current programs alive than to cut taxes.

That’s a safe assumption, isn’t it, since they haven’t cut those programs or whittled those taxes?

But state leaders can hear the voters, too, so they’re trying to force local governments to hold the line on taxes. They can’t provide any relief themselves, but maybe they can make someone else do it.

Read related Tribune coverage:

  • In their just-ended legislative session, Texas lawmakers mowed through a list of politically divisive issues that could have lasting effects on how others see a state that’s been known for years as a mecca for business. [link]
  • There’s a simple test to tell you whether the promise of a tax cut is really a tax cut: Is there money in your hand? [link]
  • Some Texas lawmakers want to kill the franchise tax that so many businesses hate. So far, so good. But it might leave a hole in the state’s pocket when it inevitably comes time to rebalance the state’s financing for public schools. [link]

Author:  ROSS RAMSEY – The Texas Tribune

Dan Patrick Unconvinced by House Action on Bathrooms, Property Taxes

After threatening to force a special session of the Texas Legislature unless lawmakers approve a “bathroom bill” and property tax legislation, Lt. Gov Dan Patrick on Monday appeared to be unconvinced by the House’s actions on the two issues.

“I share Governor Abbott’s concern about the lack of a rollback provision in Senate Bill 669 on property taxes,” Patrick said in a statement about a property tax measure the House passed Saturday that did not include a rollback provision for local tax increases. Patrick, like Gov. Greg Abbott, had indicated he wanted the House to approve Senate Bill 2, to require local governments that want to raise property taxes by 5 percent or more to get voter approval, but that proposal stalled in the House.

On the bathroom front, Patrick said he had concerns about the “ambiguous language” the House approved as an amendment Sunday to address bathroom use by transgender Texans in public schools because it “doesn’t appear to do much.” The measure the House approved would require schools to provide single-stall restrooms, locker rooms and changing facilities to students who don’t want to use facilities designated by “biological sex.”

“There is still time for the House and Senate to address these concerns — which are both priorities for Texas voters — in a meaningful way,” Patrick said.

Throughout the session, Patrick and Straus have been at odds over what should be the Legislature’s priorities. The lieutenant governor’s statement comes after a weekend of House votes on the issues that have emerged as sticking points in his efforts to push for Abbott to call a special session. The regular legislative session ends May 29.

Last week, Patrick had said he was prepared to go to a special session if the House did not act on the property tax issue and some version of a “bathroom bill.”

Abbott said both pieces of legislation were also priorities for him, though he has not publicly threatened a special session over the two items.

But following the House’s vote on the bathroom amendment, House Speaker Joe Straus said in a statement that the governor made clear “he would demand action on this in a special session.”

Patrick had pushed for the House to move on Senate Bill 6, the measure his chamber passed out in March, to regulate bathroom use for transgender Texans or to amend a bill with language from a related House measure. Both measures stalled in the House, which on Sunday approved a more narrow proposal.

Over the past few months, Straus was reticent to allow a vote on the Senate’s bathroom proposal, saying the issue felt “manufactured and unnecessary.”

And ahead of the House’s vote on the property tax measure — which was set on the House calendar ahead of Patrick’s special session ultimatum — Straus argued that the House had addressed the issue of offering taxpayers relief by focusing on a measure intended to reform the state’s complex school finance system.

A spokesman for Straus did not immediately respond to a request for comment on Patrick’s statement.

Read related coverage:

Author:  ALEXA URA – The Texas Tribune

Analysis: The Taxes Texas School Districts are Afraid to Cut

A state law that’s supposed to keep a leash on school tax increases might be preventing temporary tax breaks in the Texas districts with the highest tax rates. But reversing it could make it easier to raise taxes.

It’s hard to tell the tax hawks from the tax doves sometimes. A legislative proposal meant to make it easier for school districts to grant temporary tax rate cuts was derailed this week by opponents who say it would also allow districts to raise taxes without voter approval.

It would do both things — and either of them would probably make property taxpayers happy.

Currently, school districts with tax rates of $1.04 or more can’t raise their rates without voter permission. They also cannot temporarily lower their rates without holding another vote when it’s time to return to the original higher rate.

Several lawmakers in the Texas House and Senate have proposed allowing a school district that’s already got a tax rate above $1.04 to lower its rate temporarily without having to hold a new election to raise it back to the original rate. If they could do that, taxpayers would be more likely to get those temporary cuts.

A district with a rate of $1.15, for instance, would be allowed to cut the rate to $1.10 for a year and then return to $1.15 without going to voters for permission. The logic is that voters had to approve the original rise to $1.15, so there’s no need to ask them again.

House Bill 486, sponsored by state Rep. Gary VanDeaver, R-New Boston, made it to the full House but was swatted down by his colleaguesttxxt on a technicality. He has time to fix it and send it back to them. The Senate is poised to consider identical legislation next week.

State Rep. Jeff Leach, R-Plano, is the one who called the foul on VanDeaver. With some amendments, Leach said, he might be persuaded to support VanDeaver’s legislation.

Leach’s home school district — Plano ISD — is a prime example of the districts in question, and his taxpayers could be among the proposed legislation’s beneficiaries.

PISD voters overwhelmingly approved a $481 million bond package in May 2016. Among other things, that money gives the district temporary budget relief, according to School Board President Missy Bender — enough to cut spending by $15.6 million and to cut $7.7 million from the district’s “Robin Hood” payment to the state this year.

But the district expects it will need to revert to its current tax rate pretty quickly. Under current law, it could cut the tax rate now — by about 3.8 cents, Bender says — but would have to hold an election to return to the current rate later. Alternatively, the district can leave things be, keep charging taxpayers the higher current rate and save the unspent proceeds for a future rainy day.

“I can’t keep it at the lower rate, but from time to time, I’d like to be able to save them money,” Bender said of the district’s property taxpayers.

Roughly a third of Texas school districts — 438 — had maintenance and operations tax rates above $1.04 in 2016, according to the Texas Education Agency. Most of those — 329 — had moved their rates all the way up to $1.17, the highest rate allowed under normal circumstances.

The current law encourages districts to leave the tax rate alone, Bender says — to skip the temporary cut and bank the money. That avoids the district’s risk and expense of a future election. Supporters of current law contend the districts should lower rates whenever they have the opportunity and shouldn’t raise them under any circumstances without voter approval.

Under the proposal stalled in the House this week but still alive in the Senate, her district would be able to lower its rate by 3.8 cents now and return — without a new vote — to its current rate later on. Supporters of changing existing law, a group that includes Plano and most of the state’s other school districts, argue taxpayers who’ve once approved a tax rate shouldn’t be asked to approve it all over again after a temporary tax cut.

The cuts in question would probably not be huge — Plano could save its average homeowner about $113 with a 3.8-cent cut this year, Bender says. But any cuts would probably be welcome; taxpayers only rarely get these temporary reprieves under current law.

“Boards are hesitant to lower the rate when they are able to do so because they would have to hold another election to return to the rate that voters had already approved,” state Rep. Donna Howard, D-Austin, told the House Ways & Means Committee at a hearing last month. Howard, who sponsored legislation identical to VanDeaver’s and made the opening argument for both of them, said any tax rate increase would be one that had previously been approved by voters.

As the districts read it, this is a choice between temporary tax cuts and no cuts at all. As the defenders of current law see it, the decisions over rising tax rates ought to be in the hands of voters and not school boards.

But only one side is dangling a tax cut.

More columns from Ross Ramsey:

Author:  ROSS RAMSEY – The Texas Tribune

EPHP Spring Training
Utep_DEC_728
Amy’s Ambassadorship
Bordertown Undergroun Show 728
shark 728×90
STEP 728
JustLikeThat728