I doubt you’ll be surprised to learn that your property is worth more this year than last year. A lot more. It’s a trend we’ve come to expect in Collin County year after year.
Final current property appraisal figures—what your 2018 taxes will be based on—were just published. The average increase in property value is 9.58 percent.
Technically, that’s a 9.58 percent increase in your net worth. It sounds great, but that’s theoretical wealth that you can’t spend. At the same time, you still have to pay taxes on it.
What A Constant Tax Rate Would Look Like
If your tax rate remains the same, you could see a 9.58 percent increase in the dollar amount you pay in taxes.
Keep in mind, the county’s portion of your property tax represents only about ten percent of your total bill. You can imagine that increase across school districts, cities, and college if all governments keep the same rate.
Keeping the status quo would mean an additional $30 million in tax dollars over what we brought in last year. $30 million more in one year! That’s a 13% increase over the collection last year, including new construction.
No local government could in good conscience enforce a 13% increase in tax dollars. And it’s certainly not worth the pain it would inflict on your pocketbook.
I’ll go out on a limb and predict that a major county tax rate cut is on the way. I will be shocked if the Commissioners Court doesn’t vote for a significant rate reduction.
What the No-New-Taxes Tax Rate Would Look Like
If we choose instead to go with the no-new-taxes tax rate–keeping the dollar amount you pay the same as last year—the county would still collect an additional $10 million from new construction which continues to grow at a healthy pace. This is what’s also called the “effective rate”–it keeps your tax dollars equal to last year regardless of appraisal increase.
You won’t hear arguments in favor of this no-new-taxes tax rate from most other local governments. So how do they justify increasing your tax bill by almost 10 percent every year?
Beware of politicians telling you the wondrous things they can accomplish with just a few more of your hard-earned dollars. They always need just a little more. That’s why we need property tax reform.
What Property Tax Reform Would Look Like
With tax reform front-and-center in the legislative special session in Austin right now—and looking increasingly like it will fail to pass—I believe that you will hear more local government officials spin all sorts of reasons to explain why they must raise taxes.
The property tax reform bill they are debating involves a measurement of government growth called “combined population plus inflation.”
It’s a rate that conservative reformers have long used to keep taxation and the growth of government in check. It’s the threshold that would trigger an automatic election under Senate Bill 1.
This year, Collin County’s population-plus-inflation rate is 5 percent. Clearly, our appraisal increase has far surpassed that. If SB 1 were in effect today, it would trigger a vote by the taxpayers.
The opposition may call it a “cap,” but don’t believe it. It wouldn’t cap anything.
It would trigger an election before these big-dollar tax increases would go into effect—giving you a chance to vote “yes” or “no” on the kind of tax increase you have no automatic vote on today.
I want to hear from you–
Since SB1 isn’t in effect today and there is no automatic vote at the polls, I’d like to hear from you…
Of the following three options for 2018, which do you believe the Collin County Commissioners Court should approve?
A. The same dollar amount you were taxed last year, or what I call the “no-new-taxes rate.” This would yield an additional $10,312,127 more than last year (from new construction) while not affecting the dollar amount you pay.
B. The amount that accounts for population plus inflation. This would be a 5% increase in the county budget. This number is typically considered by conservative economists to be a good baseline for capping tax rates. This would yield an additional $11,067,561 to the county.
C. The constant tax rate. This means that your rate stays the same, but the average tax bill’s dollar amount would increase by 9.5%. This would yield an additional $29,939,374 (including new construction) over last year.