Property tax burden in the Crossroads continues to grow in 2018

Nov. 02--Homeowners throughout the Crossroads received their tax bills last month, and for most of them, those bills asked for a bigger check to local government entities than they have in years past.

The 2018 tax rates passed by the various local taxing bodies in South Texas have continued a steady trend during the past decade in Texas, in which the amount homeowners pay in property taxes has steadily increased throughout the state.

Although not all tax rates in the Crossroads increased in 2018, it's likely that many homeowners will be paying more this year, either because their property values increased or because at least one of their local taxing units -- like their local school district -- increased its rate. Hurricane Harvey threw a wrinkle in this trend in some parts of South Texas, like Victoria and Refugio, where property values decreased slightly.

"One of the major trends that we're seeing is the dramatic increase in property values," said John Kennedy a senior analyst at Texas Taxpayers and Research Association.

Kennedy noted that this trend, which he said has persisted for about a decade, was more visible in the state major metropolitan areas, and that some counties battered by Hurricane Harvey in 2017 actually saw decreasing property values this year.

The Advocate looked at the tax rates that apply to homeowners living in the county seats of seven counties in the Crossroads. The highest increase in tax rates in the area were in rates from school districts. Victoria school district raised its rate by 11 cents, to $1.3763 per $100 of valuation. In Refugio, the local school district increased its tax rate by about 13 cents, to $1.49 per $100 of valuation. And in Cuero, the local district upped its rate by about 11 cents, to $1.61 per $100 of valuation.

Quintin Shepherd, the superintendent of Victoria schools, has promised that the 11-cent increase is a one-time tax increase that was necessary in the wake of Hurricane Harvey.

"We needed to come up with some funds so we could start doing renovations and get the schools back to functioning," Shepherd told the Advocate in an interview in October. "The 11-cent tax increase was designed as a stopgap measure so we could get funds from the community until we started getting funds from FEMA and insurance."

Not all school districts in the Crossroads increased their tax rates in 2018. Hallettsville decreased its rate slightly, by about 1 cent compared to last year's rate. Edna school district kept its tax rate flat. But across the state, most homeowners are paying more in property taxes, especially to their local school districts. In fiscal year 2015, 54 percent of Texas property taxes were paid to school districts, according to data from the Texas comptroller.

"School property taxes are the majority of the property tax bills that most, if not all, Texans pay," Kennedy explained. "The state school finance system is a jointly funded system with state and local property tax money, and as property values rise, and therefore the revenue from school taxes goes up, for most districts that means state aid goes down."

Texas does not levy a state property tax, and is one of only a handful of states that does not levy a personal income tax. The result is that Texan homeowners have a larger property tax burden than those in most other states, but their overall tax burden is about middle of the pack, according to a report form the Tax Policy Center.

"If you don't have an income tax you don't have access to a very large source and you got to make up it up somewhere else and we do it through sales and property," Kennedy said.

Right now, there's little evidence to suggest that increasing tax bills -- even if tax rates stay flat -- are likely while property values across the state continue to rise. An effort in the Texas state legislature to reform the property tax system fell flat. Kennedy said that, moving forward, any reform about the property tax process will have to be accomplished by the state legislature in Austin.

"One of the things that has enabled this dramatic increase in property tax burdens is the any lack of any real transparency or ability for local voters to understand the tax rate adoption process of their local governments," Kennedy said.

Ciara McCarthy covers local government for the Victoria Advocate as a Report for America corps member. You can reach her at cmccarthy@vicad.com or at 580-6597 or on Twitter at @mccarthy_ciara.

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