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New Texas Property Tax Law
- Elections
The Texas Property Tax Reform and Transparency Act of 2019 is a new Texas law that just passed with Senate Bill 2. This new law will slow the growth of taxes, but will not necessarily decrease them. Because property taxes are based on a percentage of the value of the property, even if the government did lower the tax rate, the increasing property values will increase our tax bills.
With this new tax law, bigger cities, counties, and school districts that want to raise taxes will need more voter permission than they needed in the past. For example, in the past, before this law was passed, if a city wanted to raise its taxes by more than 8% in a year, they needed to call an election to get it approved. However, after this law has been passed, if a city wants to increase taxes by more than 3.5% in a year, it needs approval in an election.
Now, after this new law, there is a lower limit on what the government can do to your taxes without election approval. Before this law was passed, the school districts could increase taxes by up to 7.99% without election approval, if need be. Now, after this bill was passed, the cap for school districts is 2.5% for a tax increase. If the increase is more than 2.5% then an election has to be called.
In the past, voters had to petition to have an election, but now it is automatic with the laid-out tax limits. The goal is to have a less arbitrary and capricious process.
These elections must be part of November general elections. Accordingly, this means, government officials cannot hide these elections in low-turnout elections like those in June or August. These elections must be held during the general November elections every time; hence, the name of it: The Texas Property Tax Reform and Transparency Act!
- Information Available
If you want more information on all the tax numbers (both old numbers and new numbers), you must now look on the county website, for your district. These numbers will be more up-to-date than they have ever been in the past.
If the government wants to raise the tax rate, they must give the citizens a detailed breakdown notice of exactly what changes will be occurring before it happens. This notice must be either on a newspaper or on a government website. This is a new requirement, so citizens are informed and can actually have an informed voice at public hearings. How this is really going to work is unclear at this time.
- Protests
The new tax law says that tax protesters, if they ask, should be given a copy of the data, schedules, formulas, and all other information the chief appraiser will be speaking about at the hearing. There is no charge to this information, but in order to get it you must ask. If you don’t ask, you don’t get.
- Protection for Those at Hearings
The appraisal review board cannot raise the property tax value for someone who has gone in for a hearing. This is to protect people who go to hearings and to incentivize them to participate more in the process.
- Accountability
So how do government leaders increase taxes above the new revenue limit? They have to make this change via a recorded vote and at least sixty percent of the board must vote in favor of increasing revenue for it to actually increase.
- School taxes
The majority of your tax bill relate to school-related property taxes will drop by around eight cents per every $100 valuation next year, and 13 cents per $100 in 2021.
- Sharing with Poor Districts
Here is the catch: historically, wealthier districts were required to give some money to poorer districts. Now, a lot of wealthier districts will not have to do this any longer. A lot of wealthier districts that historically were giving a portion of their income to poorer districts will now be able to keep their money for their own use.
- Cannot Have Too Many Positions
Under this new law, one person cannot hold too many positions within the property tax system. For example, if someone has represented protesters or has appraised property they cannot then serve on the appraisal district’s board of directors.
- Comptrollers’ Office and their Oversight
Before this law was passed, the state comptroller’s office had very limited oversight of the property appraisal districts. Now, the office must review each appraisal district’s operation every two years.
The comptroller also needs to start releasing a standard property tax manual of rules and procedures, which they were not doing before this law was passed.
- Exemptions
With the new law, appraisal districts can send emails or mailed notices to home owners regarding the change in the value of their property. This communication would also alert them to exemption eligibility to their homes. Historically, homeowners had to apply for this tax exemption, and often times, they were not aware of it.
- Conclusion
Under the new tax law, if government officials are thinking about raising taxes, it is going to be easier for the public to hear about it. The general public will be able to more easily interact with their elected officials and have more of a voice in the tax increasing process. Not only will the general public have more access to government officials, but they will be incentivized to participate in the process more. There are more opportunities for the public to speak up and convince their elected officials to keep taxes low. On paper, this system is good for public involvement and for slowing the growth of property taxes in Texas. However, let’s not forget the real reason: wealthier districts will not have to give a portion of their income to poorer districts, and the wealthier districts will be able to keep their money for their own use. If you have kids, hope you live in a good district under this new law.
