It is time to set the annual tax rate for the city. From the agenda for tomorrow night’s City of Shoreacres City Council meeting:
8.3 Consideration, discussion, and action to propose a property tax rate that exceeds the effective tax rate. [Webber]
8.4 Consideration and action to schedule Public Hearings on the property tax rate increase. [Webber]
As I’ve mentioned several times, our city’s property tax rate is the highest in the area, by far. Here is a quick chart of the surrounding cities:
The number in red is the premium that you and I pay to live here.
The language in the two agenda items above is standard and doesn’t necessarily indicate that Mayor Webber wants to raise taxes. But miss this meeting at your pocketbook’s peril.
For a good understanding of tax rates, effective tax rates, and the rollback rate, click here to read Comptroller Susan Combs’ primer on the subject. The “Effective Tax Rate” mentioned in the agenda item above is a way for politicians to increase revenue without saying they raised taxes. In fact, they can go 7.99999{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} above that rate without hitting the “rollback rate”, which would require an election. Add that to the almost certainty that the Harris County Appraisal District will be increasing your appraisals next year and you can see the problem. Again, that agenda language is standard and you won’t know what the intent is unless you attend the meeting tomorrow night.
Also, council held a special meeting last week and passed an ordinance to hire a temporary police chief. Interesting that the City Administrator doesn’t send out notices for special meetings – you have to drive to City Hall and check the bulletin board, which I didn’t do, so I didn’t know about it. Oh well.
It looks like they were successful in removing the police chief – his name is no longer on the city website. Sucks to be on the “outside” I guess.
Thanks for the information. As usual, it is informative, but, in this case, a little bit misleading.
Texas law is very weird as it pertains to raising or lowering property taxes and how it needs to be conducted by city government. There are two parts, the millage rate(actual property tax rate) and the effective tax rate. The current Shoreacres millage rate is .844381 and on a property valued at $200,000, the homeowner would pay $1689 in taxes.
If HCAD increases the value of your home to $210,000, then your “effective tax rate” would be .8042, lower than the millage rate. City council has no control over what HCAD values your home at. That is between HCAD and the homeowner to fight over.
The “effective tax rate” is, in simple terms, calculated this way:
(previous year’s taxes – $1689)/(new/current HCAD value of the home – $210,000) * $100 = .8042.
If city council wants to lower the millage rate to .81 from .844381, then that would be a proposal for the property tax rate to exceed the “effective tax rate,” in this example. The problem is that the proposed millage rates have not been announced. City council can really only look at the HCAD values for all the home combined for determining the appropriate millage rate.
All I can say is that Texas law is weird, but we have to live with it.
Also, notice of special meetings are and have been, in accordance with the Texas Open Meeting Act, been posted on our website. You don’t need to drive by city hall for that information.
Mr. Hoskns,
Your calculation is incorrect and the information I posted above is absolutely accurate. You are mixing ETR calcs for the city with a homeowner’s rate, I think but I really don’t know what you are doing. If you read Comptroller Combs’ explanation of the ETR, perhaps that would help.
The current city tax rate is exactly as described in the chart above. If your home is valued at $210,000, your tax rate is still $0.844381 and your tax is ($210,000/100)*$0.844381= $1,773.20.
I have no idea what you mean by “millage” rate but click over to HCAD and you can view your rate and appraisal. hcad.org
I didn’t say the meetings weren’t properly noticed. I said that the city administrator chooses not to provide email notice as is done with regular meetings.
Let me rephrase this for better clarity:
(previous year’s taxes – $1689)/(new/current HCAD value of the home – $210,000) * $100 = .8042.
to
($1689/$210000) *$100 = .8042
Mr. Hoskins,
Okay, I think I see what you are trying to do. It doesn’t work that way though. You have to aggregate all of the properties in the city to obtain the ETR. The ETR is simply the rate at which HCAD estimates that the city will collect the same revenue from the same properties as it did the previous year. Thus, if some properties go up and some go down, but the aggregate value is the same, the ETR is the same. If more properties go up than down, the ETR will fall. If more properties go down than up, the ETR will rise. This calculations excludes any new property that wasn’t on the tax rolls in the previous year – that tax revenue is a “bonus” if you will for the first year.
The council can raise the ETR by up to 7.999{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} without forcing a rollback election, 8{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} being the magic number.
The key number to look at is the Total Revenue projected – if that is up, then by definition, taxes have increased. But that is not the “legal” definition. Governments can claim that they have not “raised taxes” because the calculation of ETR is the legal definition.
Ok, I used the word “home” instead of “homes”, but really should have used the term “properties” in my original response. I should have said:
“City council can really only look at the HCAD values for all the properties combined for determining the appropriate millage rate.”
I was just using the same simple single home example that you used in your original post. The last time I checked, looking at values that are combined, means combining or summing them together, also known as an aggregate value.
Millage rate is just another commonly used definition for a property tax rate, but defined using a tenth of a penny. The millage rate in Shoreacres is .00844381. My real point is that the only figure that counts is the actual tax rate, not the ETL.
Increasing tax revenues or maintaining tax revenues is not the same as raising tax rates. We do have a political party in our country, whose principle is that lowering tax rates will increase tax revenues. If the Houston Yacht Club were to increase its sales by 50{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} and the city collects 50{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} more in sales tax, city council would not have increased tax rates to achieve a collection of a 50{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} increase. The tax rate is the same.
You are confusing tax rates and raising taxes with tax revenues collected.
Mr. Hoskins,
Once again, I’m not confusing anything. I did not give an example above of ETR – I gave an example of actual current tax rates so that citizens could know how much of a premium they are paying to live in Shoreacres.
Nor am I confusing tax rates or raising taxes. Again, if a government sets a rate that they KNOW will increase total tax revenues, they have raised taxes, period. The example of supply side economics that you provide is not the same thing – that is an intentional reduction in tax rates in anticipation of tax revenue increases. Not the same thing at all.
Fact is, you stated that I was providing misleading information and you are incorrect.
Tomatoes- tomatoes gentlemen?
Some questions I think the average citizen would like to see clarified are;
1. Why are our tax rates so much higher than our sister communities? (Try not to miss Morgans Point 2010 census count of 339 citizens for ensuing arguments with regard to population/tax base…)
2. The vote was taken and passed for ” Consideration, discussion, and action to propose a property tax rate that exceeds the effective tax rate” … does this indicate the mayor and our city council members intention to raise our tax rate and if so……
3. WHY?