Kelli Ann Cox, Publisher, and Eric Yollick, Editor-in-Chief, The Golden Hammer
Texas governments – state and local – are going through their budget processes right now to approve their spending and taxes for the coming Fiscal Year, which usually begins October 1, or their academic year for school districts. Like a recurring dance at high schools, governmental entities go through the same procedures every year, which always end with the Big Lie: “we’re pround that we lowered your tax rate.”
Amazingly, every year school districts, County Commissioners Courts, special purpose districts, cities, and other local governments increase their spending and the amount we pay to each of them with our property tax bills increase. But somehow, they’re proudly announcing what a great accomplishment they’ve achieved and how hard they’ve worked to achieve the miraculous result that they’ve lowered your tax rate.
In Montgomery County, one of the most conservative counties in Texas (supposedly), Precinct 3 County Commissioner James Noack recently bragged on social media “During my tenure the tax rate has been reduced by 15%…” Fortunately Noack had the integrity to conclude the sentence “while taxable values increased by 18%.” Sadly, however, local school districts didn’t reveal that level of integrity. While raising spending and taxes substantially, both the Conroe Independent School District and the Magnolia Independent School District issued statements bragging about their “lower tax rate” for the upcoming school year, as if they’ve given some sort of gift to local taxpayers.
Houston ISD, the largest school district in Texas, regularly announces its lowering its “tax rate.” The Woodlands Township just announced the same.
Every single one of those taxing authorities is actually raising our taxes and they do so every year!
How do they do it?
Your property tax bill comes from the following calculation:
TAX RATE x PROPERTY TAX APPRAISAL = TAX
For example, if the County government sets a tax rate of $21.69 cents per $100 valuation and your home has a property tax valuation of $250,000, then your County government taxes are:
.2169/$100 x $250,000 = $542.25..
If the County Commissioners Court then lowers your tax rate to $20.69 cents per $100 valuation but your property tax valuation goes up to $300,000, then your County government taxes become:
.2069/$100 x $300,000 = $620.70.
While your tax rate went lower, your taxes increased, because your property tax valuation, which has little to nothing whatsoever to do with the fair market value of your home, increased more than your tax rate went down. In other words, in that example, the County government raised spending, raised your taxes, but deceived you by announcing they had lowered your tax rate (and expected your vote and your pat-on-the-back).
The taxing entities usually have direct control over their own spending and their own tax rates. Thus, your elected representatives try to claim in Texas that they’ve done all they could do for you by lowering the tax rate.
They’re lying to you on two counts.
First, if they had actually achieved spending reductions, they could have lowered the tax rate substantially more and actually delivered a tax reduction to you instead of an increase.
Second, it turns out in Texas that its your own elected officials who control your property tax valuations as well. Here’s how the same works. Local appraisal districts have a board of directors which sets the policy for re-appraisals. They decide they parts of the county to suffer a re-appraisal and they have direct control over how aggressive those re-appraisals are to be. While the Texas Tax Code provides some guidance on how the mechanics of appraisals actually work, and it has nothing to do with true fair market value, the appraisal district board of directors decides how aggressively tax appraisals will increase. Appraisal districts have a five-person elected board of directors and a sixth person, the county tax assessor-collector sits on the policy-making board as well.
Who elects the appraisal district boards of directors? The taxing entities do. Their votes are based upon how much in taxes they collected during the previous year. In Montgomery County, the independent school districts together – all six of them – collect the vastly greatest sum of taxes, so they tend to control the elections to the appraisal district boards. As a result the elected “representatives” of the people vote how the taxing entity on which they serve will vote to cast its ballot in the appraisal district board of directors election.
That’s why the Appraisal District Board of Directors has members who are beholden to the largest and most rapidly growing tax collecting governmental entities. That’s who elected them.
Therefore, when elected officials or the taxing entities on which they serve proudly announce how they have “lowered the tax rate,” in essence they’re intentionally deceiving you by failing to admit their culpability: they are also responsible for raising your property tax appraisals much higher than they’ve lowered tax rates, so that your total taxes will always increase, as long as they fail to bring government spending under control.