As rising real estate values threaten homeowners with much higher property tax bills, cities across Texas are trying to ease the pain by lowering their rates.
➤ The Austin suburb of Round Rock notched the deepest recent cut when it approved a new tax rate of $0.383244 per $100 valuation. The new rate is nearly 14 percent lower than the previous rate of $0.436323, though it is higher than the no-new-revenue rate of $0.363244.
Although the rate is lower, median home values in Round Rock have risen 8.7 percent from last year to about $500,000, and Austin overall is sitting at $578,000, up 5 percent from last year. As a result, the average tax bill in the city will likely increase by $122.77 per year.
Round Rock — one of Austin’s largest suburbs with a current population of over 123,000 — has actually seen its headcount fall in recent years. The current population is 4.2 percent lower than it was in 2020
➤The Katy City Council unanimously approved a reduced tax rate of $0.44 per $100 assessed valuation for the fiscal year 2022-23 during its September 26 meeting.
This represents a 1.6 percent decrease from the previous year’s rate but is greater than the no-new-revenue rate of $0.430733 proposed during the public hearing.
The rate includes $0.077688 for debt service and $0.362312 for maintenance and operation expenditures, according to city documents. City Administrator Byron Hebert said in a memo to the City Council that the goal was to restore the city’s budget to pre-COVID levels and ensure expenditures do not exceed revenues.
The city expects an 8.8 percent increase in tax revenue from last year, totalling $19 million from both residential and commercial properties, due primarily to increased home values in Katy.
Although the housing market in Greater Houston started to cool slightly in July, the median home price in Houston was still up 3.9 percent from last year as of August 2022, clocking in at around $349,900. In Katy, the average is about $380,000, up 13.3 percent from last year.
Johnson Development Corp. is currently building over 3,000 single-family homes as part of its Cross Creek West master-planned community in close proximity to Katy.
➤ This month the Lone Star College System (LSCS) board of trustees will formally adopt the $0.1078 per $100 valuation tax rate proposed during its September 20 special meeting. The rate is the same as last year’s.
The Lone Star College System is located within the Houston suburb of The Woodlands, which recently adopted the lowest property tax rate in its history.
LSCS Chief Financial Officer Jennifer Mott explained during the hearing that the district’s maintenance and operations rate will be decreased by 7.8 percent from $0.08 to $0.0737, while the debt service rate will go up by 20 percent from $0.027 to $0.0341, allowing LSCS to pay off $18.6 million in debt.
➤ The Dallas suburb of Southlake approved a reduced property tax rate of $0.36 per $100 valuation at its September 20 meeting, down 1.08 percent from last year’s rate, and even lower than the city’s no-new-revenue of $0.0364.
This is the fifth year in a row the city has reduced its property tax rate.
While the average Southlake home price as of August was $1.4 million, among the most expensive in the DFW and an increase of nearly 17 percent from last year.
➤ The Dallas-Fort Worth suburb of Trophy Club’s new tax rate of $0.434799 per $100 valuation is a 2.29 percent drop from the previous rate of $0.445. However, it will still generate 6.5 percent more property tax revenue than the previous year due to rising home values.
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