When a developer uses a cow or two to dodge property taxes, guess who pays: Homeowners
We finally know what Texas lawmakers meant when, at the end of this year’s legislative session, they crowed about relief from property taxes.
Developers who keep a cow or two on a few urban or suburban acres are paying less in back taxes when they cash in and build a shopping center or another subdivision, thanks to a new state law.
Yes, the Legislature also poured more money into schools, allowing local districts to lower their tax rates. But that merely slowed the increase in what homeowners in growing areas such as Tarrant County are paying, as their property appraisals rise.
The connection, as outlined by reporter Anna M. Tinsley’s examination of the impact of agricultural exemptions in Fort Worth and Arlington, is this: Exemptions allow landowners to pay far less than their property is worth. Agriculture exemptions will reduce tax collections by Tarrant County governments by tens of millions of dollars this year. Local school districts, cities and the county have to make that up somewhere.
Under the new law, a property owner who converts agricultural land will pay three years of back taxes based on the land’s full value, along with 5 percent interest. That’s down from five years and 7 percent. As homeowners struggle with booming bills, it’s a bad time to relax what commercial owners are paying.
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And lawmakers need to find a way to significantly close the loophole for urban properties. Tarrant County has more than 1,300 agricultural exemptions. There just aren’t that many small farms that need protection in the nation’s 15th-largest county. Set different rules for large urban and suburban counties to ensure rural parts of Texas aren’t hurt.
If you think the ag exemption and other property-tax exclusions reduce government spending, think again. For years, as the economy has soared, local governments have played the game of spending copious amounts of new revenue while holding tax rates steady or even cutting them. The secret ingredient, of course, is massive increases in property appraisals.
So, choking off revenue through loopholes won’t shrink the growth of government. The long-term fix for homeowners is in reforming the appraisal process.
No one wants to apply more pressure to small agriculture concerns. But there should be a way to protect them and prevent abuse of the law in Texas’ growing urban areas.
Right now, what a developer doesn’t pay on a valuable piece of land will merely increase the burden for the rest of us — no matter how many steers they plop down in the middle of a future shopping center.
This story was originally published November 27, 2019 at 5:02 AM.