Rising property values push property taxes higher, putting squeeze on homeowners
There’s a longstanding warning that Texans should be on guard when the Legislature is in session because we all face a degree of risk with what our lawmakers might do.
If you doubt that, take a look at where we are right now in the often-promised protection from local governments, according to defeated state Sen. Konni Burton, “continuing to tax you out of your homes and businesses.”
There’s a celebratory mood in the halls of the state capitol about the Senate’s approval of what is said to be relief for homeowners facing ever-higher tax assessments.
Is this about any sort of real tax relief, or are our representatives just reveling in how they have ensured their re-elections by having slayed the dragon of “runaway” property taxes?
You may wonder why all the high-fives of self-congratulations when you take a look at what is taking place, and wonder how any of that is going to help the state’s taxpayers.
On one hand, while the bill to cap property tax growth at 3.5 percent moves into the House chamber this week, there is, on the other hand, a proposal to increase the sales tax burden on all of us by a whopping 16 percent.
How that may work out for any one of us remains unknown and undefined. We can call it a work in progress but the outcome depends on details where the devil resides.
The scheme would raise the state sales tax from 6.25 percent to 7.25 percent. When local sales taxes are included, that will tie us with California for the highest sales tax rate in the country.
The increase would produce billions of dollars that would, supposedly, result in lower property tax bills. The exact amount for any individual is totally unknown.
If, for example, school districts were required to reduce their property taxes by an amount equal to revenue received from new sales taxes, then there might actually be a real property tax cut.
But that doesn’t come without a corresponding burden of paying more for every purchase that is subject to the state’s formula of what goods and services are sales taxable.
In order to figure out how your overall tax burden would be impacted, you would need to know two things.
First, how much are you currently paying in property taxes and second, how much are you are currently paying in sales taxes?
The first is relatively easy to find – look up your property tax bill. Just go to the county website and click the appropriate link.
Then take a look at the personal ledger you keep for every dollar in sales taxes you pay day in and day out. Yeah, that’s a trick suggestion, since you have no such ledger. If anyone does, I apologize for the oversight.
I think you get the point. There’s virtually no way to know how you would fare with these competing changes to your tax burdens.
It may all be moot anyway since the proposed sales tax increase would require voter approval in November. A University of Texas/Texas Tribune poll has found 74 percent of voters opposed to raising the sales tax.
So maybe we will be left with only an arbitrary cap on what local governments can collect from property taxes. And that doesn’t mean your property tax bill next year will be lower than this year’s.
For some communities, the new limit will mean you have to tell your city councils and school boards what you are willing to give up.
The mayor of Dallas, for instance, has said such limits imposed on property tax growth would be “catastrophically harmful for cities.” He further warns that his city’s plans to hire 100 new police officers would be dashed.
His concerns have been echoed by his counterparts across the state, but few in Austin seem to be listening.
That’s the risk I referenced earlier. And, it’s real.