PROPERTY TAXES

I have read about the proposed bill that Texas House Speaker Phelan and Lt Governor Patrick have agreed to, but don’t see real benefits for taxpayers in it.

Texas’ state budget is funded only by sales taxes and fees. It does not use property taxes to fund its operations, so why is it getting involved in local property taxes? Knowing that the state will send ‘surplus’ funds to local governments, some local officials are going to simply increase their own budgets, depending on the State to fund the difference. When called on it, they will say that increased municipal services justify their actions.

What will the State eventually want for its money?

The ‘deal’ being talked about is based on there being a budget surplus in the state’s accounts. Will this subsidy be a one time event or will it occur annually forever? What does the bill say?

The root cause for the increased taxes is the increased appraisals resulting from a law that the state passed in 2019. That law made the State Comptroller, who is not a real estate professional, responsible for setting the appraisal standards for Texas’ 254 local CADs.

Greatly increased CAD appraisals beginning in 2020 prove the connection. What was the purpose of that law? Who benefitted from it?

The state does not assess or collect property taxes. Why then did it exercise the legal authority to be involved in a process that it has no open stake in and should receive no benefit from? Is this simply a question of state pre-emption or is there a political aim behind this law?

My own CAD appraisal has increased in value 5x since 2020. My house has gone up 3x. The combined total has gone up 2 1/2x. Is there a purpose in these huge increases that have come so quickly? My neighbors have experienced similar levels of increases despite there being no real estate boom going on where I live. Properties sit for months and are often reduced in price before being sold. The current appraisals simply aren’t justified by reality.

If someone intends to sell his property, lenders will require an individual appraisal by a licensed appraiser to approve a loan. A guess by someone in Austin, as the 2019 law calls for, should not do, but the CADs must comply with the Comptroller’s appraisals. I live in a county that is so decidedly rural that it has only one incorporated town and no police forces, just a sheriff. What was the Legislature thinking, that urban and rural homes can be appraised similarly and fairly from a distance? Why was a law like this passed?

When your property appraisals repeatedly go up by six figures annually, an increase of $70K in a homestead exemption for those who are eligible amounts to chump change. An exemption increase less than the appraisal increase will result in a tax increase for sure. Those not eligible for a homestead exemption just get left out Debate on the proposed bill is deliberately ignoring increased appraisals to distract from the increase in taxes. What is its real purpose?

If you really want to lower property taxes, repeal the 2019 property appraisal law that ignited this fire. Exemptions are simply a shiny object that won’t last. My children, who won’t get my exemptions, may not be able to afford to keep my house when I leave it to them. If I rent the house, I lose the homestead exemption and probably won’t be able to pay the resulting taxes if I am to make a profit. It will take 1-2 years to requalify for that exemption.

This is almost off topic, but for my projected $1,000/month in property taxes, what do I get? The county built and maintains two roads. The state built the other three. There is a small local library, long since payed for. The courthouse and its very necessary administrative functions are 15 miles away. The sheriff is 20 miles and a long wait away. My subdivision roads are private. There are no public utilities operated by the county. The local school district is so small it’s all on one campus. That is all that I can think of. It’s not much.

Somehow though, when the appraisals go up, the cost of providing those same services will go up. The increases will be a huge burden on senior citizens, fixed income or not. How do you plan for such a thing to happen? If they have to let relatives live in their house so they can move into assisted living, what happens to their exemptions?

Property taxes are hard to deal with at any time. The 2019 bill produces no outcome that is beneficial to ordinary citizens. It will only make keeping the family home much harder to do. Who does it benefit?

Dan Patrick refuses to speak about the appraisals as a cause of the problems, but that doesn’t make them go away. It simply makes for one less reason to not vote for him again.

Phelan did not speak about appraisals either, but I already won’t vote for him. Let’s engage in a little projection into the future, just for fun.

It’s 2025 and the budget surplus is almost gone. People are beginning to take notice and wonder what’s next. The legislators, in session that year, tell us that the surplus will finally be used up. If local subsidies are to continue, an income tax must be passed that year. We will be told that higher sales taxes that once produced a surplus don’t do it anymore because of budget increases. The State needs a more reliable source of income and only an income tax will do.

Taxpayers are now accustomed to the state subsidizing local taxes and don’t want that to stop so they don’t oppose a state income tax. Many won’t think beyond that until it’s too late and the first income tax statement arrives. Think about it.

Houses will be sold or given up because of the increased tax burden resulting from the appraisals. Renters will take over neighborhoods. The sense of belonging and community that makes an area a good place to live will end. Federally subsidized housing will become prevalent over time, just like in urban settings. Block grants are already encouraging that very thing. The middle class will end soon after that.

I realize that this probably sounds melodramatic. You can say it can’t happen, but look around at all of the things that you would have said the same thing about a few years ago.

First you create a problem, with appraisals, then you solve it, with exemptions. Yep.

Joe Dantone Medina