Why should we pay 10 percent more in property taxes this year?

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Lots of us are talking about property valuations these days. And by “talking about,”  of course, I mean blowing up the internet with red-faced emoji and comments demanding something be done.

The complaints seem to boil down to two issues:

  1. How could my property value increase so much and so quickly?
  2. How come commercial properties and people with super-expensive homes seem to be getting off easier than everyone else?

The Morning News did an extensive package on property value changes recently, and it’s worth pointing out that homes in every price category except those valued at between $100,000 and $249,999 increased in value between 7.51 percent and 8.9 percent — actually less than the amount overall Dallas home prices increased last year. According to the DMN, during the past six years median North Texas home prices have increased by 40%, and Dallas home prices gained 12.6 percent from last April.

So average valuations for property tax purposes have risen about 8 percent, while overall sales prices have risen about 8.5 percent — seems like we don’t have much to complain about. Right?

Now, how about the million-dollar-plus home values?

True, according to the DMN story, tax valuations of those properties increased by 7.51%, even as we keep reading stories about some of these homes selling for $10, $20 or even $100 million? So why can’t the tax people keep up with these numbers when they’re assessing values?

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There’s a pretty simple reason: Those are crazy prices, not necessarily based on comparable sales or price-per-square-foot comparisons with neighboring properties. These luxury properties are simply selling, during these relatively OK economic times, for whatever a person with money bulging from his/her pockets is willing to shell out for them.

Those sales aren’t burdened by the need for an appraisal to prove-up value; these guys are paying cash for these homes or purchasing them using some other kind of financial wizardry that the rest of us don’t have access to because we don’t have the assets or cash flow to support it.

Really, though, here’s what we need to keep in mind: Property tax valuations are relatively meaningless in terms of the amount of property taxes we pay. The relevant issue is the tax rate assessed by the City of Dallas, Dallas County and the Dallas and Richardson Independent School Districts.

If each of these entities does absolutely nothing this year, each of their coffers should increase by about 10 percent over last year’s property tax revenue simply because property valuations have increased by that amount. That means that without doing anything, they’re going to have about 10 percent more property tax revenue to spend.

And here’s where the rubber meets the road in this situation: Should each of those entities automatically receive a 10 percent increase in property tax revenue? Or should they roll back their tax rates by about that amount so they receive the same amount of property tax revenue as they received in 2015, leaving all of us who own homes in Dallas county to pay essentially the same amount of property taxes as we did last year — even though the value of our homes has increased.

That’s a pretty easy call, isn’t it?

If you believe each or all of these tax entities need more tax dollars and are wisely spending the tax dollars they already have, let them have an increase.

If you believe each or all of these tax entities can’t blow our tax dollars fast enough on foolish projects and overpaid senior managers, yank their chain and cut their cash flow.

Unfortunately, there’s absolutely nothing any of us can do to impact that decision today, because most of us didn’t vote in the election for City Councils, School Board Trustees and County Commissioners, and the people who most of us didn’t vote to elect will be making that decision when they set their budgets later this year.

That’s why, for the most part, we are going to get what we deserve this time around. And I will bet you an expensive tollroad through a nearby river that we’re going to be paying more in property taxes than we did last year.


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  • RedWolfeXR

    It counts locally, it doesn’t count for the BIG elections. They have it backwards.

  • RedWolfeXR

    Its important to understand that the BUDGET for those agencies comes before the tax rate. Then the correct mill/percent rate is applied to the total book value of property in the district to generate those amounts. If those agencies are raising their budgets 10% then the mill will stay the same. Otherwise they will go down to match the new budget.

    In real terms what you pay in taxes should not significantly change compared to inflation. Of course that is as long as the local taxing agencies don’t run up their budgets in response. That is what killed CA, they passed Prop 21 after years of runaway valuations and their tax base went lopsided with new sales taking a larger share of the taxation over long term residents –but they didn’t adjust down their budgets for the new paradigm.

  • Chuck K

    “Unfortunately, there’s absolutely nothing any of us can do to impact that decision today, because most of us didn’t vote in the election for City Councils, School Board Trustees and County Commissioners, and the people who most of us didn’t vote to elect will be making that decision when they set their budgets later this year.”… YEP! So tired of hearing “oh, my vote doesn’t count”, or “I don’t vote in local elections”.

  • John Franklin Guild

    The point is that as long as you are going to decide how much people should pay in taxes to support government services based on the value of property they own, then property values will dictate tax bills. It is dumb, in my opinion, to base taxes on property values for a number of reasons, but it is intellectually dishonest to support a property based tax system and then to complain about tax bills increasing as values go up. If anything, one potential benefit of property based tax systems is that it increases the revenue for government when there is substantial growth, like that seen by Dallas. Our values wouldn’t be going up if there were not more people coming here, which increases the demand on city resources. I’d prefer income taxes support at least part of local and state government and that property taxes be reduced, but as long as we are going to depend on property taxes to pay for government services, the tax bills will need to increase as values go up.

  • John, I have to disagree with you, although we are probably just parsing words here. The tax rate has far more impact on the amount of taxes we pay because it’s controllable; there’s not much we can do about valuations, high or low, because the market controls those.

  • John Franklin Guild

    “Property tax valuations are relatively meaningless in terms of the amount of property taxes we pay.” Taxes = valuation x rate. It is literally 1/2 of the tax equation. It certainly isn’t meaningless.

  • I’ll believe it when I see it. This city’s terrible, broken, pothole filled roads cost me $800 in suspension repair last week.

  • Los_Politico

    We know if we cut taxes like Rawlings has suggested we definitely wont get anything.

    I am pretty confident we’ll have better roads and more cops. I do not think the city or school district (or other taxing authorities) are just hankering to hire more “overpaid senior managers”. And what you see as a “foolish project” I may see as a much needed amenity. I don’t think my vision of the city will be implemented 100%, but that’s democracy (and I do vote, 5 times since November, I believe).

  • So, Los_Politico, are you confident that if we wind up giving an extra 10 percent in property tax dollars to the taxing authorities that all of those things will come to pass?

  • Los_Politico

    Here’s what I know:

    a) my home has gone up in value about 33% in the last 3 years and is still only valued at about 2/3 what I could sell it for.

    b) the roads are in terrible condition, we need more cops, the parks aren’t mowed frequently enough, and my neighborhood school has a tiny supplies budget. Yeah, I could use more of the things our taxes pay for.