Elections 2022Local NewsTaxes & SpendingWith Over $21 Billion in Bonds on Ballots, Local Governments Lowball Property Tax Increases

There are over 150 different bond proposals on ballots across Texas, collectively worth $21 billion, which voters will decide on next week.
November 4, 2022
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Over $21 billion in local government bonds are on ballots across Texas and requirements set in state code leave the false impression these debts will cost taxpayers zero dollars.

They range from a $2.3 billion item in Austin ISD down to Pflugerville ISD’s $400,000 price tag.

Political subdivisions often have multiple different propositions on the ballot at once, separating school building projects from athletics expenditures. Many of these are sold by localities as establishing “no tax rate increase,” but keeping the tax rate level, or even reducing it, may and often does result in a bill increase due to rising appraisals.

Regardless, because these general obligation bonds are on the ballot, each one will result in a tax increase on the macro level. Additional debt must be paid for in some way, and that way is property taxes.

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Texas code requires localities seeking bonds to publish a “voter information document” (VID) that lists the amount of debt and estimated interest approved with the bond, along with the locality’s currently outstanding debt. But it also requires an “estimated max annual tax increase that would be imposed on a homestead” in the political subdivision.

The code states that estimate be based on a $100,000 homestead, substantially lower than most average appraised home values across the state. For example, the City of Houston has seven different bonds on the ballot totaling $478 million, and based on their calculation for a $100,000 homestead — that includes accounting for a $20,000 standard exemption — none of the VIDs indicate a bill increase.

But the median home value in Houston according to Zillow is $272,000. The Harris County Appraisal District pegged the average home value increase at roughly over 20 percent this year, putting last year’s average home value around $217,000.

The city does not provide estimated tax rate changes, just the total requested debt for issuance, but does say that if each proposition passes it’ll yield a higher tax rate than citizens would otherwise see. To use the current tax rate as a placeholder, no change in the Interest & Sinking tax rate would still yield a $65 bill increase.

Austin ISD, which has the single largest bond proposal in the state, says in its VID that the $2.3 billion item would only raise homestead tax bills by $6, using the same $100,000 figure. But according to the Travis Central Appraisal District, the average homestead within Austin ISD is $545,000.

Plano ISD is asking for $1.5 billion in debt approval across four propositions, on top of a 6.9 percent Maintenance & Operations (M&O) rate increase, which requires voter approval due to the Texas Legislature’s 2019 reforms. That M&O increase would yield an additional $38.6 million in tax collections during the 2022-2023 school year.

Their VID also estimates a $0.00 bill increase using the $100,000 home as a marker. But Plano ISD’s average home value is roughly $500,000.

Through all of this, Plano ISD is marketing the entire slate of proposals as a “tax rate decrease” — something many localities do.

Dripping Springs ISD has three bonds on the ballot collectively worth $481 million — none of which, per the district’s VIDs, will cost taxpayers a penny. But again, that calculation is based on a homestead value far lower than the district’s average, which according to the Hays County Central Appraisal District is $726,000.

And this one too is marketed as “no expected tax rate increase.”

Another thing that localities often publish on these bond websites is a rebuke of the state law that bonds propositions have a line on the ballot that reads, “This is a property tax increase.”

“[A] new state law,” reads the Dripping Springs ISD bond site, “now requires every school district to include the statement ‘THIS IS A PROPERTY TAX INCREASE’ on the ballot, regardless of the actual impact on that district’s tax rate.”

“If approved by voters, the DSISD total tax rate is not expected to increase.”

But again, due to appraisal increases, a reduced tax rate will often still bring in more tax dollars. The changes in bills will vary from property to property based on appraisal shifts and exemptions. But homeowners are not the only ones that pay property taxes; businesses of all kinds do as well.

Not every VID pegs the bill change at $0. Galveston ISD’s VIDs estimate a $60 bill increase for a $100,000-valued house should each of its five propositions pass. As property values increase, so will the bill change, and Galveston ISD’s average appraised home value is $376,000 according to the Galveston Central Appraisal District.

These forms are meant to provide clear transparency of these bonds’ financial implications. With most places in Texas seeing appraisals far higher than this form’s calculation sets forth, the actual picture isn’t reflected on the form. Also, these VIDs can be very difficult to find; some localities make them easy to find on their respective bond information websites, but others do not.

These calculations provide little insight into what the average homeowner will see should the bonds pass.

See a list of all the local bonds on the ballot in Texas here.

Editor’s Note: The Galveston ISD average appraised value was updated after hearing back from the Central Appraisal District.

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Brad Johnson

Brad Johnson is a senior reporter for The Texan and 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.