If they have their way, local government entities locally and statewide will have you believe they aren’t raising your taxes. But are they really telling the truth?
Across the state, local government entities have been approving tax rates for the upcoming fiscal year. While some cities, school districts and other taxing districts have openly approved rate increases, others have kept tax rates even. Many districts will claim this is not an increase in taxes, although your tax bill may tell you otherwise.
At least in Amarillo’s case, nearly every year, property valuations increase. These valuations are set by local appraisal districts, where individuals serving on boards to approve the overall rolls may or may not be appraisers and realtors. Often times, property valuations skyrocket, with those who own the properties unable to sell the property for a value even close to the price tag placed by the appraisal districts. This is not just an occurrence in Amarillo, but all over the state. With less than 20 percent of individuals, on average, protesting property valuations set by districts, many people are complacent paying on whatever valuation is set by the appraisal district.
When property valuations rise, taxing districts will often keep rates steady to cause an “effective” tax increase. This means that while your rate may be steady, you will likely still be paying more to the taxing districts, as nearly every district will claim no tax increase occurred, while still admitting more revenue will be brought in for the fiscal year.
For example, if your tax rate is the City of Amarillo’s 2017 rate, $0.363640, and it stays the same over the next fiscal year, but your property value goes up 1 percent, you will be paying more than your previous bill, based on the valuation increase.
I’ll let you decide: is this a tax increase?
The City of Amarillo is just one of likely thousands of taxing districts that will take this approach. While the rate did rise to cover bond debt, the maintenance and operations rate stayed steady, with City staff admitting in memos that this will cause for an increase in revenue, meaning an effective tax increase.
There actually is a way for taxing districts to make sure no tax increase - “effective” or otherwise - takes place. In this scenario, the taxing district will lower its rate to meet appraisal values to even out revenues. In this case, taxpayers pay what will likely be an identical tax bill, ensuring that no tax increase really happens.
So, the next time you hear your elected officials or government employees claim they didn’t raise your taxes, really consider what actually happened. Did your valuations rise? Did the rate stay the same?
Tax increase are not complicated to understand. You just have to know the right places to look.
-Thomas Warren III, Editor-in-Chief
