Texans need to remember that, in general, higher property value appraisals do not raise your property taxes; raising the amount of property taxes you must pay is done solely by elected local government officials. The state does not levy any property taxes.
Each year after new appraised values are set, each local government which levies a property tax must calculate and publish the No New Revenue tax rate. That figure, which reflects appraisal changes, keeps each entity’s tax take equal to the previous year’s take, in aggregate, over its taxing district from existing properties.
New development and significantly improved property falls outside of the No New Revenue tax rate calculation. The No New Revenue tax rate means no new revenue from properties that were taxed in the previous year and that have not seen improvement. New development and improved properties are not part of this calculation which means that the taxing entity can adopt the No New Revenue tax rate and still enjoy much new property tax revenue from new development and improved properties. Last year’s tax rate is completely meaningless in relation to the new rate set each summer or fall by local governments.
Certainly an individual’s appraised value may increase (or decrease) more than the average increase (or decrease) across a taxing district. If an individual’s property value, for taxing purposes, increased more than the average across the taxing district, even adoption of the No New Revenue tax rate may result in higher taxes for that taxpayer but, the taxing entity’s (school district, city, county, hospital or special services district) officials would not have voted to raise taxes. It is in these specific cases that the fight is with the appraisal entity, the other half of the property tax system.
One of the most important things to remember and correct politicians and media representatives about is this: Last year’s tax rate, so often talked about and used in a comparative nature, is completely meaningless in relation to the new rate set each summer or fall by local governments.
For example, if your city’s appraised values increased five percent, the No New Revenue tax rate is lowered to produce the same revenue from those same properties as was taken the year before. The calculations for doing such has nothing to do with what was the previous year’s tax rate or property base value numbers as such will have changed.
Don’t be fooled.
Only a vote to adopt the No New Revenue tax rate is voting for no tax increase.
And, only a rate set below the No New Revenue rate is a tax cut.
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