Two Panhandle counties appear to be moving to increase property tax rates before the new law goes into effect next year.
Texas Scorecard reported that Potter County commissioners are proposing a property tax rate of $0.69125 per $100 property valuation, which is above their “effective” tax rate, $0.66465 per $100 property valuation. The proposed rate will generate a 4 percent revenue increase from the previous budget year, or more than $3 million.
To the south, Randall County commissioners, Texas Scorecard reported, are proposing a tax rate of $0.44126 per $100 valuation, up from the current rate of $0.42406 per $100 valuation.
The effective tax rate, also known as the “no-new-revenue” tax rate, will tax the existing population the same amount in total as last year, Texas Scorecard reported.
The new property tax law going into effect next year in Texas requires residents to vote on any property tax increases imposed that are higher than 3.5 percent in cities and counties with a population of 30,000 or more.
The bill, SB2, was spearhead by Sen. Paul Bettencourt, R-Houston, and received support from Republican Gov. Greg Abbott.
Up until 2020, cities and counties have been able to increase property taxes by up to 8 percent without voter approval.
The new law also limits tax increases for school districts by 2.5 percent without voter approval, and excludes growth, or new tax revenue from new properties added to the tax rolls.
appraisal process is exactly why taxes will continue to increase despite the capped tax rates.
“A reduction in the tax rate can still mean a tax increase,” Shelby Williams, Plano City Council member, said, because cities and counties adjust appraisal rates.
If appraisal values rise, a taxing entity can keep the same tax rate as the previous year, or even reduce the tax rate, and still collect the same or more property tax revenue than the previous year.
According to data from the Dallas Appraisal District, from 2013 to 2018, the average city property tax bill for homeowners increased by more than 43 percent, from $1,100 to $1,580. The City Council lowering the tax rate over that five-year period didn’t actually offset rising property taxes for Dallas homeowners.
This month, the Dallas City Council proposed raising the average city property tax rate for homeowners by 9.5 percent over last year’s rate, which requires voter approval. The council plans to vote on increasing property taxes by more than $83 million on Sept. 18.