PART IV of The Craymer Series": There is no permanent Property Tax Rate. New Tax Rates are set each year at about this time and Its those Tax Rates that determine your actual Property Tax Bill.
By Dale Craymer
Texas Insider Report: AUSTIN Texas In our states hot real estate markets 100s of 1000s of Texans protested their ballooning home appraisals. If you were one of those who successfully shaved a few thousand dollars off the value of your home you may be very happy.
But dont rest on your success it could cost you.
All your tax appraisal really does is determine how big your slice of the property tax pie will be. You might feel good that your slice will be a bit smaller but if the pie is a lot bigger youre still looking at a bunch more calories on your plate.
The size of the pie will be determined by the budgets of the various local districts that show up on your property tax bill: school district city county and possibly myriad special purpose districts such as a municipal utility district community college district or hospital district.
Their spending plan for the next fiscal year will determine how much tax revenue they have to raise. To raise that money its simple math: the value of the appraised property in their jurisdiction multiplied by the tax rate they adopt. That will determine your final tax bill.
You see the property tax is unlike any other tax you pay; there is no permanent tax rate. Taxing units set new rates every year.
This annual process of setting budgets adopting tax rates and ultimately generating your tax bill is now underway across Texas. Appraisal districts are telling local taxing units (Cities Counties Schools & ISDs etc.) the value of the property under their jurisdiction.
By Aug. 7 taxing units had to calculate their effective tax rate the rate that would raise the same amount of money as last year essentially a no-new-taxes tax rate. They then go to work deciding on the actual tax rate they want to adopt.
Youll see these tax rates over the next several weeks in notices in the pages of your newspaper or you can track them down online.
If a taxing unit wants to raise more money than last year it must adopt a rate higher than the effective tax rate. But before it can do that and increase taxes the governmental entity must hold two public hearings (only one for a school or water district) to allow constituents or taxpayers to voice their opinion.
Further the motion to adopt a higher tax rate requires officials to publicly acknowledge they are raising taxes and it must be approved by a 60 percent supermajority of the governing board.
If youre concerned about your impending property tax bill these hearings are more important than your appraisal. Unfortunately they are poorly attended as they take place in the dog days of summer or in the midst of back-to-school activities (rates generally must be adopted by Sept. 30).
And if six different taxing units are on your tax bill that means six different public hearings. Fortunately you can make your voice heard by picking up the phone or shooting off a couple of emails.
Last session the Texas Legislature considered but did not pass a bill that would have provided a lot more clarity by giving you a real-time tax notice that showed how much more (or less) in taxes each taxing unit wanted from you. Under the proposal you would have had that information before new tax rates were adopted. You could then either attend tax hearings or contact officials before they acted.
Property taxes rise in large part due to complacency. Local officials respond to those they hear from. They constantly hear from constituents who want a new park or road or something else that costs money.
But if they dont hear from those who are concerned about their property taxes then local school city county or other budgets and your taxes that support them are almost certain to increase.
Dale Craymer is President of the Texas Taxpayers & Research Association.
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