Property Tax

Property Tax

It’s the taxing governments – county, city, school district, college – that set the budgets and determine the dollar amount you pay in property taxes.

How Your Property Tax Bill Adds Up

Recent reports on property tax reform efforts in the legislature have brought up a number of questions and assertions about who is to blame for rising tax bills. One reason for confusion and disagreement is that there are the three entities involved in the process:

  • The Collin County Central Appraisal District

  • The Tax Assessor/Collector

  • The Taxing Governments

Let’s take a look at each entity’s involvement in the tax process…

The Central Appraisal District

The Central Appraisal District is the independent government entity that appraises hundreds of thousands of commercial and residential properties in Collin County. The Central Appraisal District sets the value of your property.

The county has limited interaction with the appraisal district. We contribute to the appraisal district budget in direct proportion to the county tax base – about 10% of the total district budget. The county also gets 10% of the votes for the governing board members. School districts contribute the majority of the appraisal district budget and votes for board members.

Other than budget contributions and limited board member votes, the Central Appraisal District is an independent entity totally separate from the county, cities, school districts and college.

The Assessor Collector

The Tax Assessor Collector simply receives tax dollars from taxpayers and sends individual governments their share of the tax receipts.

The Taxing Governments

The taxing governments (county, cities, school districts, and Collin College) receive property values from the Central Appraisal District, then determine what individual tax rate would yield the required revenues to operate their individual government. They have a lot of leeway in deciding what is “required,” so this part of the process can vary considerably.

Who is Raising Taxes?

The answer is simple. It’s the taxing governments – county, city, school district, college – that set the budgets and determine the dollar amount you pay in property taxes.

They can handle this one of two ways. 1. Set a budget based on needs, and then determine the lowest tax rate that will adequately serve those needs. 2. Determine how much more in tax dollars they would receive by keeping rates steady, and then decide how they can spend your additional tax dollars.

Because of higher property valuations and new construction, revenues will increase by an average of 12% in the coming year if individual governments don’t take action. For a lot of politicians, that means their budgets (and sphere of influence) can grow by 12%. It’s in their interest to do nothing.

Who Can Lower Taxes?

Just because they can increase spending (and rake in tax revenue), doesn’t mean they should. There is no sound reason for governments to keep the same tax rate under those circumstances. Local governments have the ability to lower tax rates and still cover the costs of necessary services.

I first ran for county judge on a plan to cut county spending that had gotten out of control. Back then, the budget was growing an average of more than 10% year over year.

According to the Dallas Morning News, property values in the region have increased 50% over the past five years. If local governments continue to do nothing, this period will easily exceed that the extravagance of that era.