They are getting more sophisticated

Let’s hand it to the city for figuring out another way to scam the taxpayers.

The way property taxes work in Texas requires the city to figure out how much money they raised in property taxes last year.

They they look at what the same properties are appraised at this year and must tell us the tax rate that will bring in the same amount of money.  This is called the effective tax rate.  If property values go down they can raise their effective tax rate thus bringing in the same amount of money as last year.  If property values go up they must lower their effective tax rate.  New properties are not part of the equation.

From there if they want to raise more money they are now capped at an increase to the effective tax rate of no more than 2.5%.  If they want to go over 2.5% the voters must be given an opportunity to vote on the issue.

Simple huh?

Well this year as it turns out our central appraisal district folks took a conservative view on commercial property values.  They subtracted 3.3% from what they thought commercial properties were worth just in case the commercial property owners decided to fight their valuations.

This is nothing new, they do it every year.

What was new was the 3.3%.  Normally they take a 1.8% reduction on average.  The net effect according to the city’s own chart was that the city set their tax rate using the 3.3% decrease instead of the 1.8% norm.

The actual calculation requires a little bit of algebra so I will just use the city’s chief financial officer’s numbers.  He said in a city council meeting recently that the result was $10 million of additional revenue to the city.  He then said “we’re over collecting on property taxes”.  The city manager then stepped in and said that they were not really over collecting they were just collecting based upon what the central appraisal district came up with.

The city chief financial officer told city council that city staff did not agree with the evaluation but they used it anyway.

That was really convenient for them.

In reality the city knew that the historical value was 1.8% but used the 3.3% number without taking it back to the central appraisal district for a better understanding.

If they claim that they did not know then they are saying that they are incompetent.

We deserve better



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