Local government budgeting season is underway in most areas, which means that it’s time for Texas taxpayers to tell their city, county, and school board officials to adopt lower property tax rates.
Much lower, in fact.
There are several reasons to press for radically reduced tax rates this year. The most obvious is that people are struggling.
Thanks to reckless fiscal policy and a lax monetary environment in Washington D.C., the cost of living is way up right now. According to one recent article: “The average American is shelling out an extra $311 a month because of the hottest inflation in a generation.” Worse, the price of gas has reached new heights. As reported earlier today: “AAA on Thursday reported that the average price of a gallon of regular unleaded gasoline in Texas increased 18.9 cents from last week, to $4.291.”
Make no mistake—the family budget is under assault right now.
Another reason to urge local officials to bring tax rates down is that property values are way up.
According to the Texas Association of Appraisal Districts, “regions around the state have seen increases in values between 20-50% since last year.” Those are historic valuation increases that could lead to massive tax hikes if local officials don’t adopt much lower property tax rates.
It’s worth noting that local officials have discretion in the tax rate-setting process. They determine where the tax rate is ultimately set. If they decide to keep it the same as last year, then that’s a tax increase given that values are soaring. If they decide to lower it only a tiny bit, then that too means they’re likely raising taxes. Anything short of a significant rate reduction should be viewed as a likely tax increase.
If local officials want to hit a home run with a tax-weary public, then they should aim to adopt the no-new-revenue tax rate, which would hold tax receipts level for the governmental entity while giving homeowners and businesses a chance to catch their breath. It’d be like calling a timeout for taxpayers.
One last reason to press for lower rates this year—local governments can afford it.
In February, the Texas Public Policy Foundation released a new report detailing property tax growth in the top 10 largest cities, counties, and school districts. The report found that from 2016 to 2020, almost every one of these 30 entities had raised taxes by more than the conservative ideal, i.e. population and inflation. And in many cases the delta between how fast taxes are growing and how fast taxes ought to be growing is large.
For example, some city governments, like Austin, increased their property tax levy by almost 70% while simultaneously only seeing a 10% growth in population and inflation. Likewise, Fort Worth ISD increased its tax burden by more than 40% even while the district’s enrollment and inflation grew just 3%. There are many other examples just like this.
The report makes clear that Texas’ large local governments are not strapped for cash. So they could most likely handle any push to adopt the no-new-revenue tax rate—or something lower!
But none of this will happen on its own. Texas taxpayers must get engaged in the tax rate-setting process and make it clear to their local elected officials that they should radically reduce their property tax rates. Let them know that the decision is in their hands, and that people are watching.