Local taxing entities are not your enemy. Your elected officials in Austin want to blame local elected officials for your property tax increase, but at the same time using your local tax base to help balance their budget through unfunded mandates.
SB1, the State Budget Act requires an increase of 13.81 percent in school property taxes during the next two years. The second sentence under “Formula Funding” reads as follows: “Property values, and the estimates of local tax collections on which they are based, shall be increased by 7.04 percent for tax year 2017 and 6.77 percent for tax year 2018.
One of my colleagues in the County Judges and Commissioners Association put it this way, “...more accurately, the legislature, the Governor and the Comptroller of Public Accounts have approved a state budget that requires a 13.81 percent increase in school property tax revenues to balance the state budget. Since most school districts are levying the maximum M&O tax rate (to satisfy Robin Hood), they conclude that these additional school tax revenues will be produced by appraisal increases. Since the Comptroller controls the procedures for property appraisals and audits the appraisal districts, this is a logical assumption.”
The Texas Comptroller’s Office is putting extreme pressure on local appraisal districts to insure values are being set at the maximum “reasonable” level; that is the source of our appraisal creep.
These school tax increases are necessary to balance the state budget because the Senate refused to address public education finance reform and/or use the Rainy Day Fund to meet increased enrollment costs as proposed by the House of Representatives. SB1 reduces the state support of public education from 45 percent in 2006 to 38 percent or slightly lower in upcoming years; this while increasing the local school property tax share to cover the additional 80,000 children that must be educated. This increase will be compelled without any hearings or opportunity for petition or rollback relief.
The Governor and the Lieutenant Governor continue to blame property tax increases on local governmental entities; primarily cities and counties. The truth is about 60 percent of your property tax bill is for school finance. As we’ve seen above the real pressure on property taxes for schools is coming from the State of Texas, to balance the State’s budget.
Cities and counties are generally less than 35 percent of your tax bill. The truth is that pressure on your tax bill from cities and counties also is primarily due to pressure from the state. The pressure comes in the form of unfunded mandates.
In an effort to go home with a “balanced budget” the Legislature cuts funding for items like Indigent Defense and Indigent Health. According to Federal Law those services must still be provided, and so the local property tax payer must pay for those State cuts.
The Lieutenant Governor had an opportunity to truly address property tax reform when House Joint Resolution 73 (HJR73) passed the House. HJR73 would have placed a constitutional amendment on the next ballot to eliminate unfunded mandates, to force the State of Texas to pay their fair share of these programs. Lieutenant Governor Patrick let HJR73 die by not bringing it before the Senate for a vote.
Don’t let the so called “conservative” voices in Austin fool you with smoke and mirrors. The major portion of pressure on our local property tax rates is not coming from local governmental entities.
Instead the pressure is from the State of Texas as the leaders in the Texas Senate and the State House try to achieve a “balanced budget” by making the local property tax payer cover the State’s unpaid portions and blaming counties, cities, and appraisal districts for the pain.
Danny Chambers is a Somervell County judge.