A Broad View by Jerry Hogan: And the Great Debate Continues

Rockwall, TX (May 2, 2023) – Currently in Austin, the House of Representatives and the Senate continue to debate two different plans to reduce our Property Taxes.

The subject of reduction in this tax has been on the forefront of issues for more than several years. But it really started to heat up after about 2008 when the economy started its upward escalation.

Why did this period in time create such sudden interest?

There really is a simple explanation of Why based upon how our property taxes are computed.

Each year on Jan 1, the Central Appraisal Districts in the various counties places an assessment on the value of all properties in the State of Texas. This assessment, as modified by some legal exemptions, is then multiplied by the various tax rates applicable in each county to arrive at the property tax bill for the current year.

Thus, in the actual computation of our tax, two variables are important: the tax rates assigned by the various taxing agencies in each county and the assessed value of the property assigned by the Central Appraisal District.

Generally speaking, the taxing agencies in Rockwall County have done a commendable job in actually lowering their tax rates, year over year, attempting to slow the escalation in our property taxes.

The major issue that has caused so much concern over the increasing property taxes has been the assessed value put on the property by the Central Appraisal District.

These assessed values have continued to go up, year over year, because by state law, the assessments must be done based upon MARKET VALUE of the property.

Thus, it is clear, that as the economy continues with its upward escalation, the value of homes and property will continue to go up. For example, here in Rockwall County homes that sold for $130,000 10 years ago are now selling in the range of $300,000-$350,000.

Obviously since assessments are done based upon MARKET VALUE, they will be considerably more now than what they might have been 10 years ago.

Thus, you see why our property taxes continue to rise in a rapidly growing economy.

Neither the House nor the Senate version of reductions is based upon the assessed value of properties. Instead, the Senate version raises the Homestead exemption for all,  plus an additional reduction for those over 65. The House proposal reduces the amount the assessed value could increase by only 5% versus the current 10%.

Using these two proposals, it is reported that the Senate version, for a $300,000 home, would reduce the property tax by $760 for those under 65 and a decrease of $945 for those over 65. The House version would reduce taxes by $650.

While both proposals would reduce some tax on properties, neither addresses the actual methodology of determining the assessed value of properties. As long as MARKET VALUE remains the criteria for assessing value, and the economy continues to rise, then property values will continue to rise also.

But progress is being made. Several sessions ago the Legislation addressed the extent to which taxing authorities could raise their rates without citizen approval. Now, this session they are addressing a way to reduce the amount of the assessment that can be reduced to help in reducing the tax.

Perhaps next session, after the two Houses agree upon a compromised solution to their proposals this session, they will take it another step forward and look at why and how MARKET VALUE is the driver on establishing the property tax values we pay each year.

Keep the faith…and vote for whom you think will continue this quest for reduced property tax!!!

Jerry Hogan is a former Rockwall County Judge who volunteers to write these articles. He can be reached at jerryhogan@sbcglobal.net or 214-394-4033