In 2022, Texas had the seventh-highest effective property tax rate in the nation, trailing behind New Jersey, Illinois, Connecticut, New Hampshire, Vermont, and New York. As such, property tax appraisals are a very big deal. Last year’s property tax reform bill opened the door for a brand-new type of politicization in appraisal districts, and it’s shaking things up.
In 2023, Texas decided to spend some of its budget surplus on a reduction in property taxes, specifically increasing the homestead exemption. However, it also made three seats on each appraisal board open to public election. Previously, the board was entirely appointed by various municipalities and taxing agencies, depending on the area.
In Tarrant County, home of Fort Worth, those three seats were won by conservatives who vowed to cap appraisal raises and extend the time between appraisals by two or three years. This trend followed suit in Bexar and Johnson Counties. Nominally, the elections are non-partisan, but the winners have mostly been self-described conservatives backed by Republican leaders.
Broadly, their promises about appraisals are popular. Even with the relief from the expanded homestead exemption, many Texas homeowners feel afraid of being taxed out of their property. Capping appraisal raises at 5 percent can prevent homeowners from being hit with unexpected tax bills they can’t pay, and delaying the appraisal gives them even more breathing room.
However, there are downsides to this process.
First, the new system throws even more uncertainty into Texas public school funding. Schools are already dealing with massive budget shortfalls with no relief in sight thanks to Governor Greg Abbott holding any funding increase hostage until he passes his school voucher program. If appraisals are moved to every two or three years, it makes planning more difficult for school finance offices.
Second, board members are getting elected thanks to promises that might lower property taxes. Future candidates keen to hold the positions are likely to promise more and more reductions or extensions to win support. The supposedly sober work of property appraisement is now being pressured by a board that partially answers to a constituency rather than through scientific measurement.
Thus far, the application of these plans has been haphazard. Tarrant didn’t get its proposed three-year appraisal cycle, though it did vote for a rule that said there must be “clear and convincing evidence” to raise an appraisal higher than 5 percent. Johnson passed their three-year cycle, though, and Bexar adopted another platform plank, the freezing of appraisals if the homeowner had successfully protested the value the year before. Clearly, the movement is spreading.
There is some question about whether these changes to appraisal customs are strict. The Texas tax code says that all taxable property must be assessed of its values by January 1. Another part says that property must be assessed at least every three years. The new boards argue the second rule trumps the first, opponents say the opposite. The matter is likely to be tied up in official bickering for the near future. In the meantime, expect the changes seen in Tarrant County to take root elsewhere.
