A Broad View by Jerry Hogan: More on property tax

ROCKWALL, TX (Dec. 6, 2022) You know, sometimes the things that come out of Austin just have to make you laugh.

If you remember, several sessions ago the group in Austin ended with their pronouncement that the Property Tax issue had been fixed. The subject was addressed by our legislative group in Austin because of the “discontent” of the citizens of Texas with the escalating property tax they were being forced to pay each year.

Their “fix” really amounted to nothing more than putting limits on how much the taxing authorities could raise their tax rate each year. But unfortunately, the tax rate was, and is, not the problem with property taxes.

Briefly, our property tax is computed based upon the assessed value of our property multiplied by the various taxing authorities tax rate. For example, if our property is assessed by the Central Appraisal Group at a value of $400,000, then that number divided by 100 is multiplied by the tax rates of the county, school, and city combined. (($400,000/100 X (School tax rate + County Tax Rate + City Tax Rate)). This year the actual numbers would be $400,000 X (1.2146 + .29.25 + .29.5), or $400,000/100 X 1.8021 or $7208.

Their solution to the escalating property tax issue in Texas is to limit the taxing authorities in how much they could raise their tax rate. The school rate could not be raised more than 2.5% and the municipalities by no more than 3.5% without a vote and acceptance of the citizens.

What a sorry excuse for a solution to a problem that affects every one of us in Texas!!

Sure the tax rates are important, BUT the real problem is the escalating assessments on our property.

Why the escalating value of our assessments? Simple. The assessments are based on “Market Value” of the property. And in 2021, the median sales price of a home in Rockwall County went from $305,000 in January to $400,000 in December. That’s a 30% increase in sales price is just a year. That means the assessment for that house also went up the 30%.

And since assessments are directly tied to sales prices, you can quickly see that the problem causing the higher property taxes each year is the manner in which assessments are done.

Now the interesting thing is that Governor Abbott and Lieutenant Governor Patrick BOTH said after their recent election, in which they won, that one of the major things they want to do is reduce the property tax burden we have in Texas.

Boy, what a new statement!!!

So how do you go about reducing property taxes in Texas?

One way of doing this would be to put an index system in place. In this scheme assessments would continue to be as now. However, based upon each county, the State Comptroller would assign an index to the assessment based upon the growth of a particular county. For example, if a county is in a rapid growth phase, then an index of say .8 could be assigned to the assessment. In this manner the assessment would be reduced by taking that value and multiplying it by .8 thereby reducing the value that would be used to calculate the property tax.

Those counties in a more stagnant condition might have an index of 1 assigned, thus the taxing value would be the actual assessment value times the taxing rates.

Another way might be to reduce the percent that an assessment could go up for taxing purposes. Today an assessed value for taxing each year can only go up by 10% if there is a Homestead exemption on the property. This number could be reduced to say 5% thus reducing the amount of any increase.

Clearly there are many ways in which property tax could be computed. All it will take is a resolve to make it happen.

And as a citizen of Texas, its clearly time to really address this issue with the goal being to actually develop a system of property tax that works effectively.. Again, as in many issues coming out of Austin, talk is cheap. Its ’now time for action and to make something happen. Let your representatives, Bob Hall and Justin Holland, know your feelings on this issue.

Submitted Letter to the Editor/Guest Column contributed by Jerry Hogan, a former Rockwall County Judge. He can be reached at jerryhogan@sbcglobal.net or 214-394-4033.