State HouseTaxes & SpendingTexas Lawmaker Calls on Local Officials in His District to Cut Property Taxes, Adopt ‘No-New-Revenue’ Rate

Local officials have available the appraisal information at the time they decide where to set tax rates.
August 1, 2022
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A state legislator asked the local elected officials in his district to avoid increasing property taxes on their residents, calling on them to adopt the “no-new-revenue” tax rate or one lower.

“Our constituents are suffering,” state Rep. Brian Harrison (R-Midlothian) wrote in a letter to his district’s local elected officials. “Some are considering selling their homes because they can no longer afford the taxes, and inflation has only exacerbated their pain.”

“They need tax cuts, not tax increases.”

Localities across Texas are in the process of setting their Fiscal Year 2022-23 budgets, which includes setting the tax rate for the coming tax year. This decision more than any other decides how much fluctuation, if at all, Texans see in their bills.

Property tax bills include segments from a taxpayer’s school district, city, county, and special districts such as hospitals.

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Data from the Texas Comptroller

School districts account for over half of the property taxes collected.

Harrison represents District 10, which currently includes all of Ellis County and part of Henderson.

There are 17 school districts and 26 other miscellaneous localities in Harrison’s district. Officials from each will receive a letter, his office confirmed.

“Rising property taxes may be the single biggest reason that constituents contact me right now,” Harrison added. “Texans have been notified of their property’s appraised value, and, given rising property values, this has absolutely terrified countless of my constituents who believe the appraisal determines the amount of tax they will owe.”

He then said, “As you’re aware, it is you, as an elected official charged with setting a tax rate, who is responsible for determining how much property tax will be due — not the appraisal districts.”

Due to rising appraisals, localities are often able to decrease the tax rate while increasing tax collections. When selling these proposals, local officials often emphasize the first and last words of the phrase “tax rate decrease” while whispering the middle one.

Harrison called on the elected officials in his district to adopt the “no-new-revenue rate” — the rate at which no additional property taxes are collected save for any new property added to the appraisal rolls — or one lower.

“A vote for any rate higher than the ‘no-new-revenue’ rate is a vote to increase taxes.”

Political subdivisions are legally required to disclose their proposed tax rate compared with the no-new-revenue rate, previously called the “effective” rate but changed as part of the 2019 “Truth in Taxation” reforms.

Also among those reforms was a reduction in the “voter-approval” rate, the highest rate at which a locality may raise property taxes without seeking the electorate’s permission.

If local officials choose not to adopt the no-new-revenue rate, Harrison asked them to put any increase before voters on the ballot.

The Texas Association of Appraisal Districts (TAAD) announced earlier this year that Texans will see the appraised value of their properties increase between 20 and 50 percent on average this year. The increase is attributed to population growth and supply chain stresses causing a dearth in housing supply relative to demand flooding the state.

At the time, TAAD pointed to the state’s 10 percent taxable value increase cap for homesteads, meaning the valuation taxed by political subdivisions may only increase 10 percent year-on-year. But that only applies to properties with homestead exemptions, rental and commercial properties do not benefit from that limit.

State officials have increasingly toyed with eliminating the largest component of property tax bills: the school district Maintenance & Operations rate. Gov. Greg Abbott has supported the idea but has yet to provide much detail on how it’d be accomplished.

Last month, Lt. Governor Dan Patrick laid out his slate of property tax priorities ahead of the 88th Legislative Session, among which is putting at least $4 billion of the state’s projected $27 billion treasury balance toward buying the component down through rate compression. That tranche is in addition to the $3 billion of federal coronavirus aid the state legislature already earmarked for continued compression during the 2023 session.

The GOP members of the state House and Senate are also keen on enacting property tax reform in some manner, with exact hopes varying from member to member. But when the legislature reconvenes next year, it will be among the top issues at hand — especially if Abbott fends off Democratic challenger Beto O’Rourke and remains committed to the idea he’s floated on the campaign trail.

Until then, Harrison and others of similar focus look to the local officials to reduce the property tax burdens shouldered by Texans.

Read Rep. Harrison’s letter below.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.

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