Dishonest elected officials, bad media reinforce public confusion on property tax rates

Why keep writing about how local government officials keep lying to citizens about property taxes in Texas, often with the complicity of local media?

Because the lying not only continues but seems to have become brazenly worse.

Take a story from the Laredo Morning Times, a Hearst paper, headlined “Laredo City Council plans to lower tax rate, talks appraisals district” as an example.

“Like county leaders, councilmembers pointed out that rising appraisals have caused confusion among the public. As these are raised at the state level, it has led to more taxes being collected locally despite lower tax rates being approved,” the lmtonline.com story read.

There is confusion among the public but lay most of such at the feet of local officials who try to hide their tax raising with gobbledygook about appraisals and tax rates as well as ignorant or complicit media. Appraised values are not being “raised at the state level.” Appraised values are determined locally.

Appraisals are made following state rules that prevent local officials from falsely undervaluing property in order that more of the burden of local school district funding is moved to taxpayers outside a district’s boundaries. State rules do not dictate the actual up or down values of local appraisals; those value changes are largely determined by the local market sales prices of property.

There is confusion among the public but lay most of such at the feet of local officials who try to hide their tax raising with gobbledygook about appraisals and tax rates as well as ignorant or complicit media.

When elected officials talk, things get even worse than when a media outlet makes such a false claim as values being “raised at the state level.”

“We want the public to understand that their tax bill is higher, not because of the government entities imposing a higher tax rate on the taxpayer but rather on the appraisals coming back from the appraisals district,” District IV Councilmember Alberto Torres said. “We did see an increase from appraisals of about 12-15%, and that is creating an increase in revenue that’s being generated in taxes.”

This statement is an outright lie.

The tax bill is higher, across a taxing district in aggregate, specifically because local government officials like Mr. Torres adopt a property tax rate higher than each year’s new baseline for rate setting known as the No New Revenue Rate. Torres doubles down on the lie with the line about appraised value increases “creating an increase in revenue.”

Appraised value increases do not create new revenue from existing property taxed in the previous tax year if the local government body adopts a new tax rate equal to, or below, the No New Revenue Rate. That is not open for disagreement or interpretation, it is fact.

And I will repeat once again this fact all should understand in order to keep local officials honest: They do not raise or lower a property tax rate each year. They set a completely fresh, new rate each year with the No New Revenue Rate as the baseline, the starting point.

Appraised value increases do not create new revenue from existing property taxed in the previous tax year if the local government body adopts a new tax rate equal to, or below, the No New Revenue Rate. That is not open for disagreement or interpretation, it is fact.

Local property tax rates in Texas are not like the federal income tax rate where once Congress sets a rate it stays the same until Congress changes it, year in and year out. The local property tax rate in Texas begins from scratch each year after changes in appraised values are factored. The default, baseline each entity works from is not the previous year’s rate, though most officials and media reports say so, the baseline is the No New Revenue Rate which changes each year based on appraised value changes.

On this issue it is easy to call the bluff of local officials.

Ask them if the new fiscal year’s property tax rate, if they didn’t vote to set a new rate due to a lack of quorum or just didn’t act on it, would be the same “tax rate” as the previous year or, would the new rate automatically default to the baseline No New Revenue Rate?

They like to talk about raising or lowering “the tax rate” but there is no “the tax rate.” The baseline changes annually and is the No New Revenue Rate and, you guessed it, if a local governing body doesn’t vote to set a new rate for the coming year, it defaults to the No New Revenue Rate.

That Laredo Morning Times story continues with more misleading from officials and it is no different than most all local press stories I read each year from across Texas at budget and tax rate setting time.

Yes, the public is confused often but it is lying local officials and a complicit media that causes the confusion. Each of these officials can simply admit that they are voting to set a property tax rate that raises your tax bill but they don’t want to because, well, they want to continue being an elected official.

 

Extra, see this great piece on how the process works: Property Tax Bills About to Hit Mailboxes.

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Comments

  1. Michael Burney says

    Robert,
    You must have been reading our local paper recently here in Andrews County. It was almost word for word what you state here, but nothing to state that not only had valuations gone up, but that the County had actually raised our rate to just below to where we wouldn’t be able to vote on it. It was a double hit for us, but everyone who works for the County gets a raise. The biggest insult was when the newspaper states the rate voted in was less than last year’s rate, but we’re paying more taxes. It left me shaking my head.

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