Counties have been granted limited revenue sources by the Texas Legislature. The primary source of county funding is the property tax. Unfortunately, this source faces serious issues and challenges.
All taxes are unpopular. The property tax is more unpopular than most others, such as the sales tax, because 1) every taxpayer is informed of the total property taxes paid annually; and 2) the tax is considered unfair. The State of Texas collects most of its revenue through sales taxes and oil and gas severance taxes. The amount of these taxes increases with inflation as the price of goods, services, and oil increases without any notice to the taxpayer. When property values were increasing, local governments could maintain a steady tax rate and collect more revenue within the rollback rate. When total property values declined three years ago, local governments were forced to increase the tax rate to maintain current revenue and services. Combined with legislation that declares any additional property tax revenue as a tax increase, local governments were unable to offset inflation, and budgets and services were cut. When the current oil boom subsides, the impact on these counties will be particularly severe.
Meanwhile, loopholes and special treatment have been granted to special interests by the Legislature. The percentage of property value for commercial property has declined, shifting more of the tax burden to homeowners. Appraisal appeals by industrial and commercial properties have sapped the resources of the appraisal districts and forced unfair settlements. Ignoring the understandable concerns of the homeowners, some legislators have begun attacking local governments and the property tax system, while continuing to vote for exemptions for special interests.
Dissatisfaction with the property tax will continue to increase until equity and balance are returned to the system. Provisions that provide loopholes and exemptions for special interests must be eliminated. Taxpayers must be educated to direct their righteous indignation toward those state leaders who profess to “feeling their pain” while delivering special treatment to large contributors. Until the system is reformed, a greater burden will continue to shift upon the ordinary taxpayer. Let’s bring some needed transparency to the state and provide real “Truth in Taxation” for our citizens.
For more information, please call me at 1-800-733-0699.