Property taxes are 'out of control' in Texas, an analyst says. | Tumisu/Pixabay
Property taxes are 'out of control' in Texas, an analyst says. | Tumisu/Pixabay
Property Taxes are a point of contention in Texas, and measures to decrease the property tax burden on Texas citizens draw bipartisan support. A report published by the Texas Public Policy Foundation in February shows property tax increases for Texas' largest independent school districts compared to the tax's preferred growth rate, which is a combination of inflation plus population growth. Property tax in almost all ISDs rose faster than the preferred rate of growth.
Cypress-Fairbanks ISD's property tax grew 16.1% from $667.3 million to $774.8 million from 2016 to 2020, according to the report. The combined population and inflation for the city grew by 10.9% during that time, resulting in a difference of 5.2%.
"If left unchallenged, these value increases have the potential to really take a bite out of taxpayers over the long-haul,” said James Quintero, policy director with the Texas Public Policy Foundation wrote in a newsletter discussing property tax appraisals and how to protest them. “Taxpayers should be prepared to defend their wallets this year—first by protesting their property tax appraisals and then by pressuring their local elected officials to adopt lower tax rates.”
According to The Texas Public Policy Foundation's report, "Just the Facts: Property Taxes in Texas’ Most Populous Cities, Counties, and School Districts 2nd Edition by James Quintero and Anthony Jones published in February, property taxes are unique in a number of ways.
First, the report notes that property taxes are “the largest tax assessed in Texas”, according to the comptroller. In 2019, nearly 50% of all tax dollars collected in Texas came from property taxes. The report also noted that there were 4,256 separate property taxing units in Texas in the fiscal year of 2019, some of which overlap. The report also claims that "The laws and systems surrounding Texas’ property tax are notoriously complicated, oftentimes requiring a taxpayer to seek help through consultants, accountants, advocates, and attorneys." Not only are the tax laws complex, but they are also growing faster than the preferred rate of growth, which is calculated as population growth plus inflation.
The Balance ranked Texas as 10th in the 10 states with the highest property tax rates in the U.S. with a median payment of $4,065 per year.
In 2021, the Tax Foundation found that Texas had the sixth highest property tax rate measured as property taxes paid as a percentage of owner occupied housing value in 2019. "It’s not a stretch to say that property taxes are out of control in the Lone Star State. As a result, local governments are getting rich while families are forced to make hard decisions," Quintero wrote in a newsletter on March 3, discussing property taxes in Texas.
His report also noted that in 2019, the 86th Texas Legislature passed House Bill 3 (2019), which made sweeping changes to the school finance system. One key change now requires school districts to conduct efficiency audits “before a district seeks voter approval for increasing tax rates.” Per state law, an efficiency audit is “an investigation of the operations of a school district to examine fiscal management, efficiency, and utilization of resources.”
Katy ISD and Conroe ISD were the only two school districts that kept their property tax growth rate below the preferred rate of growth, the Texas Public Policy Foundation report said.
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