Breaking it down: This is how the new Texas property tax law affects you
Oh, joy. After years of trying, state lawmakers passed a biggie. A property tax bill that fixes some major flaws in the system.
Senate Bill 2, the Texas Property Tax Reform and Transparency Act of 2019, is 153 pages long. It’s now a law, but it’s also a cliché of sorts: The law won’t lower your taxes but it will slow their growth.
That should make you half-happy.
What makes The Watchdog sad: Even if a government lowers its tax rate, rising property values through higher property appraisals will increase our tax bills anyway.
Doh.
November tax-approval elections
Bigger cities, counties and school districts that want to raise taxes will need more voter permission than in the past.
If a city or county wants to increase revenue by more than 3.5% in a year, they need approval in an election.
In the past, the cap was 8% before an election was called. So that meant governments increased their budgets by 7.99% if needed.
For school districts, the cap is now 2.5% for tax increases — or an election must be called.
In the past, voters had to petition for an election. Now it’s automatic.
Note: Voters in cities with a population of less than 30,000 must still petition for a tax-approval election. It’s not automatic. But smaller cities and counties have more leeway than bigger cities which must follow stricter new rules.
Best part: Elected officials can’t hide these tax elections in a low-turnout June or August election when voters aren’t paying close attention. They must be part of the November general election. Uh-oh.
Information available
All these tax numbers — old and new — for all taxing districts must now be posted on a county website. So if you’re a tax geek, you’ll have easier access to more complete, up-to-date tax rate information than before.
In addition, if a government plans to boost its tax rate, a detailed public notice is required to inform residents. The notice, in a newspaper and/or on the government’s website, explains where and when a public hearing is scheduled so you can go hoot and holler.
Gov. Greg Abbott got one of his priorities passed when state lawmakers OK’d fixes to the state’s broken property tax system. Watchdog Dave Lieber says the changes improve the system. Here, Abbott signs the bill into law.
(Ricardo Brazziell/Austin American-Statesman)
Protest info
The law says tax protesters are “entitled on request to a copy of the data, schedules, formulas and all other information the chief appraiser will introduce at the hearing.” No charge, but you have to ask.
No backstabbing
An appraisal review board cannot raise a taxable value of a property of someone who has come in for a hearing.
Better wording
Until now, the state labeled the tax rate that meant no tax increase “the effective tax rate.”
The Watchdog hated that.
Now it’s called the “no-new-revenue tax rate.”
A little better.
Accountability
Local government leaders who want to increase their revenue above the “no-new-revenue” limit must do so in a recorded vote, and at least 60 percent of the board must approve the increase.
As part of the resolution, this statement must be included: “This tax rate will raise more taxes for maintenance and operations than last year’s tax rate.”
The statement must show the increase and give an estimate on a $100,000 home.
They can’t hide.
School taxes
School-related property taxes, the bulk of your tax bill, will drop by an average of 8 cents per every $100 of valuation next year. In 2021, the drop is 13 cents per $100.
What’s your savings? For most, likely a few hundred dollars.
The state is also pumping billions into the school system in state dollars. The amount paid for each student will jump from $5,180 to $6,160.
Robin Hood is half-dead
Robin Hood, that hated take-from-the-rich and give-to-the-poor school district financing system, is half-killed. Thanks to the state infusion, many districts will no longer be forced to give as much of their money to poorer districts.
Some “rich” districts will see their Robin Hood contributions drop to zero.
ARB board training
Did the arbitration review board members who heard your property tax protest do something to annoy you?
Now they must undergo an 8-hour training session.
Ha.
Ditto on arbitrators who hear protests (for those of us, as I did, who take their protest to the next level). Required training for them, too.
Too many hats
An individual cannot serve on an appraisal district’s board of directors if that person has appraised property or represented protesters.
An individual cannot work for an appraisal district if he or she is an officer or an employee of a government that is part of the appraisal district’s territory.
More comptroller involvement
The state comptroller’s office had limited oversight of appraisal districts. Now that office will review each appraisal district’s operations every two years. Public comments will be accepted.
The comptroller is also tasked with creating a standard property tax manual of rules and procedures. Long overdue.
Exemptions are not so invisible
It always bothered me that homeowners had to apply for a homestead exemption (really a big tax discount). It wasn’t automatic, and newcomers, especially, might not know.
When they figure it out, it’s often too late to get a refund.
Now appraisal districts can send an email or mailed notice to the owner of a primary residence that shows the change in value of a property and also alerts them to exemption eligibility.
Protest help
A county chief appraiser will now display on the district website a public list of people who can provide free tax assistance in property tax protests. They can be real estate brokers or sales agents, real estate appraisers and property tax consultants.
The future
The new law creates a property tax advisory board under the state comptroller’s office to make recommendations about “the effectiveness and efficiency of the property tax system, best practices and complaint resolution procedures.”
Gosh, wouldn’t you like to sit on that board?
Bottom line
If your elected officials are raising your taxes, it’s going to be a lot easier to hear about it.
But under this law, you’re expected to do something about it.
What exactly?
The Legislature wants you to interact with and pressure your elected officials to hold the line on spending.
Fodder for future Watchdog reports.
Story by: Dave Lieber, The Watchdog columnist
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