As property taxes soar across Texas, tapping into state’s surplus being examined as a way to find property owners

HOUSTON, Texas – Weeks after property tax appraisals were sent out across the state, many property owners still cannot believe what they are seeing. Nearly every homeowner is experiencing a big increase in their property value.

In Harris County, about 95% of residential properties are seeing a jump in their property tax appraisals for this year. The climbs are unprecedented across our area with Fort Bend, Montgomery and Harris Counties all-seeing rises in the neighborhood of 30%.

“In my almost 40 years in the real estate business, I have never, ever seen such a massive increase in market values,” said Roland Altinger, the Chief Appraiser for Harris County.

FEELING THE PINCH AND SERVICES

Alicia Cortez admits life is more challenging than in recent years.

“It makes it hard when taxes go up,” Cortez said.

Her neighborhood of South Park in south Houston has seen property values ​​rise by over $50,000 since 2018 to an average market value of $143,061. Before, Cortez used to pay $900 a year in property taxes. Now?

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“I will be paying $1,250,” Cortez revealed.

Her neighbor just down the block, James, told KPRC 2 Investigates he is set to start paying $400 more per year. After identifying several trash piles along his block, we asked James if the neighborhood was better off.

“No, it’s not,” he replied.

In the neighborhood of Settegast in northeast Houston, charred buildings and piles of trash have become permanent eyesores. Yet, property values ​​still have risen by 135% over the last four years, according to HCAD. The ascent is the steepest in Harris County, according to market analysis maps produced by HCAD.

WHAT IS FUELING THE RISE?

What are the driving forces behind property taxes appraisals skyrocketing? The large number of people moving into Texas, limited inventory of new and pre-owned construction, interest rates being at historic lows in recent years and more people working remotely, are all fueling the surge, according to the Harris County Appraisal District. Doug Freer of the Nicole Freer Group says every neighborhood is seeing homes go on the market and not last very long.

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“Everywhere is a seller’s market right now,” said Freer.

While he believes the market is going to begin to plateau. Freer admits, “our marketplace here is still one of the more affordable marketplaces across the country.”

EXPECT YOUR BILL TO CHANGE IN THE FALL

State Senator Paul Bettencourt says two bills that passed during the 2019 legislature, Senate Bill 2 and House Bill 3, will have an impact this fall. Both were designed to bring reform by keeping cities, counties and school districts in check which in turn will provide relief.

“The real silver bullet at the end of the day is that we keep up our commitment to property tax relief,” Bettencourt said.

When reminded there are people who don’t want legislators to keep a commitment to relief but rather prefer the issue resolved in order to not deal with big increases moving forward.

“Well look, we only have x-number of sources for revenue for the government,” Bettencourt said.

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WHAT’S A SOLUTION?

James Quintero, with the Texas Public Policy Foundation, believes the solution exists.

“There is a way that the legislation can utilize those funds to benefit taxpayers,” said Quintero.

The simple solution for his non-partisan group is for the legislature to tap into the state’s surplus of nearly $24 billion.

The strategy is to use part of the surplus to pay down the biggest fee homeowners face, their school district maintenance and operations tax.

“We can actually compress that tax rate all the way down to zero and that will provide people with lots of tax relief,” said Quintero.

KPRC 2 Investigates ran the approach past Freer and James and both agreed that it makes sense.

“I think it would be amazing if someone stepped in to do that,” said Freer.

What does Governor Greg Abbott think about this potential solution?

“I strongly support using the state surplus to reduce the amount of property taxes owed,” said Abbott to KPRC 2 Investigates.

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While he supports using the state surplus, Abbott believes lawmakers should also eliminate the school district maintenance and operation component of property taxes, adding the approach should not be a one-time buy down.

“This has to be done in a way so mathematically it can be calculated so if we put in a billion or five billion whatever, it will be enduring for every year into the future,” said Abbott.

However, this potential plan cannot happen until at least 2023. In the meantime, Abbott says the legislation passed in 2019 will soon be hitting its mark

“I can tell you for a fact, property tax rates across Texas are going to go down,” Abbott said.

Copyright 2022 by KPRC Click2Houston – All rights reserved.

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