Texas Property Tax Reform

Reply Mon 22 May, 2006 07:55 am
Report of the Texas Tax Reform Commission
Tax Fairness: Property Tax Relief for Texans

"This plan substantially improves the school finance system, provides a record $6 billion property tax cut for homeowners and employers, dramatically increases the state's share of education funding, protects jobs, encourages investments in workers' healthcare and pensions, and reforms the business franchise tax by broadening the base and closing loopholes. And it is a net tax cut of more than $1 billion starting in 2007."

Key Benefits:
It will make home ownership more affordable for millions of Texans by providing $6 billion in property tax relief for homeowners and employers by 2007.
It will close loopholes and encompass a broader cross-section of the state economy, providing a fairer way to fund our children's education.
It encourages businesses to invest in jobs and employee benefits with deductions for hiring and investments in worker healthcare and pensions.
It dramatically increases the state's share of education funding.
Key Details of the School Finance Proposal:
Record Property Tax Relief:
More than $6 billion in annual property tax relief will be delivered to homeowners and employers by Tax Year 2007, with nearly $2 billion in property tax relief in Tax Year 2006.
It is a net tax cut of $1 billion in Tax Year 2006, and nearly $1.5 billion in Tax Year 2007.
Fairer Franchise Tax:
The reformed franchise tax will be broader, fairer and assessed at a lower rate.
A greater number of businesses will pay for the cost of educating our children.
It provides a lower franchise tax rate of 1% (and .5% for certain low-margin employers, like retailers, wholesalers, and restaurants) than the current rate of 4.5%.
Unlike previous proposals for franchise tax reform, we will provide employers incentives for hiring more workers, providing health insurance, investing in worker pensions, and investing in dependent healthcare.
The reformed franchise tax captures businesses with liability protection, as was originally intended.
Sole-proprietorships and general partnerships owned solely by natural persons are exempt from the tax.
The small business exemption is doubled from $150K to $300K in total revenue, and indexed to inflation, so small businesses can prosper and grow.
More State Dollars for Education:
The state will fund a larger share of our children's education, picking up an estimated 50% of the cost of education by Fiscal Year 2008, reversing the trend of greater reliance on local property tax dollars and preventing the state share from dropping to 34% by Fiscal Year 2007.
It reduces the amount of money recaptured and redirected to other school districts under Robin Hood.
School districts will have increased capacity to raise education dollars.
The Bottom Line:
We can have both significant property tax relief and meaningful tax reform. We can broaden the base of the franchise tax and lower the rate while ensuring schools have additional funding capacity. We can protect jobs and encourage employers to invest in their workers' healthcare and pensions. And we can do this while providing record property tax relief, making home ownership more affordable and giving Texans a net tax cut of nearly $1.5 billion by 2007.

Here in the a-hole o', anual property taxes run about $3,133.55 for an avarage house, which here is about $108,684. Property values are increasing by about 21% this year due to a hot real estate market. How much are property taxes in your neck of the . . . brush?
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Reply Mon 22 May, 2006 08:59 am
I'm curious.

With what funds in the state's treasury, then, will the schools be financed with?

That average of about 108,000 for an average house ... Is that the average for the whole state?

HOW are the schools going to RAISE money for themselves? Candy drives?
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Reply Mon 22 May, 2006 06:42 pm
The $108,684 is the the amount for an average house here in the a**hole o', that is, El Paso.

According the the Fort Worth Star-Telegram, the money that will be cut from property taxes will be replaced by revenue from expanded levies on business, tobacco and used-car sales, which are included in other bills, and by part of the state's $8.2 billion budget surplus.

I had thought that the state was near bankruptcy. According to eSchool News online, however, "the surplus is the largest in Texas in several years. In contrast, lawmakers wrote the 2004-05 budget in the face of a $10 billion revenue shortfall. Current projections indicate that the surplus will grow even larger over the next two years as the result of larger-than-expected tax revenue from consumer spending and higher oil prices."
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Reply Mon 22 May, 2006 07:20 pm
I heard about a dollar a pack increase in cigarettes.

For all I care, you can raise it 2 or 3. I don't think raising the price will make anyone quit.

Tax on used cars? Why? So people who can afford decent new vehicles can pay even more?

The average cost of a home in all of Tx was about 175,000 in 2005.

So, the rate goes down, they appraise the house as worth more. You're in better shape if you have a homestead exemption, so your ceiling is a 10% increase a year.

I bank on that 10% increase in property taxes just to play it save.
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Reply Mon 22 May, 2006 08:13 pm
What are the taxes on an avarage house in Austin, Chai Tea?
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Reply Tue 23 May, 2006 07:16 am
InfraBlue wrote:
What are the taxes on an avarage house in Austin, Chai Tea?

I honestly don't know.

Where would you look to find that?
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Reply Tue 23 May, 2006 08:42 am
In California, property taxes can't exceed 1 % of the assessed value of your property.
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Reply Tue 23 May, 2006 10:43 pm
I got this quote of the Austin American-Statesman from austinbrokeronline

AUSTIN (statesman.com) - Travis County property owners may be in for an unpleasant surprise, as property values are up 16 percent on average. The average market value of a single-family home in Travis County is now more than $236,000.

The large number of real estate transactions in the past year helped appraisers do a better job determining the true market value of properties than in previous years, Travis County Chief Appraiser Art Cory said.

In Texas, homebuyers are not required to report the price paid for their homes. The appraisal office uses various methods to determine market value including voluntary disclosures and listing prices from real estate agents' marketing materials. Property taxes rise with property values, but in Texas, there is a 10 percent annual cap on increases for primary residences.

Owners of higher-end homes will see the largest jump in property values this year, as these have been conservatively valued in the past, Cory said.

"Million dollar properties, in some cases, have doubled in value," he said.

Commercial property owners are also in for a shock, as these values are up even more than home values.
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Reply Wed 24 May, 2006 04:39 am
The house next door to me was just sold. It's a very small cottage, not even 1000 sq feet.

The former owner, who only had it maybe 1 and a half years, was bitching when she got her prop tax notice and said she was going to go down and protest it.

She was a nice enough person, but sometimes didn't look far enough ahead.

I told her...."uh, I wouldn't do that...they look at the average value of the houses in the area."

Her response...."Yeah, I know that....so?"

Well, er.....because (1) WE just finished a major remodel making our house 2000 sq feet (2) the house on the other side of you is in the middle of doing the same (3) the house across the street from you is being gutted and going to be completely redown by a speculator (it's on the market today for 485,000) and right now (4) the house next to that one is have a 2nd story put on it, AND they are building a 2nd house in the back in what used to be a huge back yard.

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Reply Wed 24 May, 2006 10:52 pm
Yep, 'tis the season for property appraisal protests in Texas. People protest the value of their houses to try to lower them so that they may be assessed lower taxes. The main arguing point is something along the lines of, "I'm protesting the value of my property because my taxes are too high," or "I'm protesting the value of my property because I can't afford the taxes." Property values are based on the market, what properties are being bought and sold for. They are not based on a person's income, or budget.

What they should be doing is going to the public hearings that the taxing entities hold when they're deciding their tax rates for the year. But, as the taxing entities only post notice of these meetings in the media, and at the city halls and county courthouses, people don't pay them much mind. What the taxing entities should do is send an invitation to these hearings to every property owner, and they should put tax information on that invitation, showing things like the amount of taxes they assessed the previous year, and what they're proposing for the current year.
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Reply Wed 24 May, 2006 11:44 pm
I just looked up some of the tax rates in Austin, TX. In the Austin Independent School District area the total tax rate in 2005 was 2.7423 per hundred dollars of property value. An estimate using 2005 tax rates applied to the avarage house value there for 2006 (according to the quote from the AAS), $236,000, comes out to about $6471.83, assuming there are no exemptions, or an assessment cap.
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Reply Thu 25 May, 2006 04:36 am
wow...with rates like that, I don't know anyone who could afford to buy a house.

One thing Infrablue....when they are saying average, they are taking into account all these house people are building out by the lake, like the ones with their own helicopter pad (seriously) For us "normal" people, the average is much lower.

However, I feel extremely fortunate and blessed I bought my house back in 1991, and it was a bank repo. Literally got it for a song and a dance. Otherwise, for what I'm paying, I'd probably be able to afford to rent a one bedroom apt. I think about that often, and am grateful.

See, time is the other factor....young couples who are buying today will in a decade or 2 be looking back on this time wistfully.
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