Updated 2:45pm April 19, 2022 to correct misstatements about increases in property taxes and to remove reference to a Travis County Tax Office tax calculator that relies on 2021 rates.
Whether property taxes increase depends on new tax rates
Homeowners began to get their appraisal notices in the mail last week, and many had sticker shock. According to the Travis Central Appraisal District, the 2022 median market value for a residential property in Travis County rose 53 percent to $632,208—a phenomenal $218,805 increase over 2021.
That comes on top of another $59,000 gain in 2020, for a two-year change of 78 percent.
Whether or not these drastically increased property values translate into a higher tax bill will depend on the tax rates that local governments set when they go through their budget process later this year.
The tax bills themselves will start coming in October 2022, with payment due by January 31, 2023.
Who sets the tax rates
The Travis County Tax Office collects and remits tax on behalf of all of the taxing entities in the county. However, Travis County, cities, school districts, utility districts, Central Health and emergency services districts each set their own annual tax rate and exemptions (subject to limits under state law).
Typically the governing body of each taxing entity sets its rate after a public hearing in August or September. Each taxing entity is legally required to calculate and post the rate that it would need to set to keep revenue flat. If it adopts a nominal rate that is higher than this, it is considered to have raised the “effective rate” (also called the “no-new revenue rate”).
Voter approval is required when a local government raises its effective rate more than 3.5 percent in a year, except in the case of hospital districts, junior college districts, and taxing units with a rate of 2.5 cents or less, which can raise their rate up to 8 percent without triggering an election.
Last year’s tax hikes
Affordability has become a favorite watchword of local Austin politicians, but that hasn’t stopped them from raising property taxes. Last year all of the largest local governments in Austin raised their effective rate. Here’s a rundown of these changes.
Austin ISD—Trustees of Austin’s largest independent school district last year set a tax rate of $1.0617 per $100 valuation, an effective increase of 2 percent. Nominally, however, the rate was 4.1 cents lower than the year before and AISD advertised it as its “lowest tax rate in 20 years”—a line that was picked up by Austin Monitor and KXAN.
At the time, AISD estimated that the average homeowner’s school tax bill would go up by about $274 under the rate. That estimate turned out to be too low; it was based on an assumed 7.9 percent increase in property values—far lower than the actual increase in appraisal values.
Trustees approved the rate unanimously, 7-0, with Kristin Ashy and Yasmin Wagner absent, according to minutes of their meeting September 23, 2021.
City of Austin—The City Council voted on a tax increase at a meeting August 11, 2021, adopting a rate of 54.1 cents per $100 of taxable value, compared to 53.35 cents in 2020. The accompanying budget forecast this would raise an extra $56.3 million, 6.1 percent more than the year before. Nine council members and the mayor voted in favor of the new rate, and Council Member Mackenzie Kelly opposed it (though she voted in favor of the budget).
The extra 6.1 percent of new revenue was far higher than the 3.5 percent maximum that is allowed in a year without voter approval. But the council was able to approve the rate without a tax election because of Winter Storm Uri, which triggered a disaster provision in state law allowing an increase of up to 8 percent without voter approval.
Council members sought to offset the increase by doubling the homestead exemption from 10 percent to 20 percent, the highest amount permitted by Texas law. They also increased the exemption for seniors and the disabled from $88,000 to $113,000.
Austin Community College—Trustees at a meeting September 13, 2021 adopted a rate of 10.48 cents per $100 of property value, nominally a reduction of 0.1 cent, which the college touted as a tax cut, saying it had adopted one on the lowest rates of all community colleges in Texas. However, board documents at the time showed that the new rate was a 6.8 percent increase over the no-new revenue rate of 9.81 cents. The trustees approved the rate by a unanimous vote of 9-0.
Travis County—At a meeting September 21, 2021, the five-member commissioners court adopted a tax rate of 35.7365 cents per $100 of taxable value, nominally a decrease from 37.4359 cents but effectively an increase of 3.03 percent. The rate consisted of a maintenance and operations tax of 30.7311 cents and a debt service tax of 5.0054 cents. The increase on the M&O portion was 3.5 percent, the maximum allowed without triggering a tax election.
The new rate passed by a unanimous vote of 5-0. Commissioners sought to offset the increase for some taxpayers by increasing the over 65 or disabled exemption from $85,500 to $100,000. County staff estimated that this would result in a savings of about $52 for those taxpayers.
Travis County Hospital District (dba Central Health)—Central Health, which finances indigent healthcare in Travis County and gives Dell Medical School $35 million a year, hiked taxes last year both for new operations revenue and to fund a new $63 million headquarters.
At a meeting September 9, 2021, Central Health’s Board of Managers approved a combined rate of 11.1814 cents per $100 of valuation, compared to 11.0306 cents the year before. The increase in the M&O portion was effectively 6 percent higher than last year.
As reported previously by the Bulldog, Central Health was sitting on ample cash reserves at the time of this vote, anticipating a contingency reserve of $226 million to start the new fiscal year October 1st and an emergency reserve of $39 million. Since then, Central Health’s cash reserves and short-term investments have ballooned to more than half a billion dollars. According to a memo from Central Health’s Investment Department, the agency had a total investment portfolio of $574 million as of February 28, 2022, not counting its extensive real estate holdings.
Central Health’s tax rate is subject to approval by the Travis County Commissioners Court, which unanimously approved it 5-0 at a meeting September 21, 2021.
Taxpayers looking for relief may be able to lower their next property tax bill by protesting the appraised value of their property.
Filing a protest triggers an informal settlement process with the Travis Central Appraisal District (TCAD). If not satisfied with TCAD’s informal offer, property owners (or their agents) can take their case to the Appraisal Review Board (ARB), an independent body tasked with resolving disputes between taxpayers and the appraisal district. Absent satisfaction with results of the formal ARB hearing, additional appeals may be pursued through binding arbitration, administrative hearing, or litigation.
“We expect this to be the busiest protest season we have ever had,” said Marya Crigler, Chief Appraiser of the Travis Central Appraisal District (TCAD), in a recent press release. That’s saying a lot because TCAD fielded more than 147,000 protests in 2021, according to charts included in the board of directors meeting materials for June 8, 2021.
“Property owners should get their protests filed early to have the most opportunity to discuss their property with our appraisers,” Crigler’s release stated.
The deadline to file a protest is May 16th. TCAD encourages owners to file their protest via an online portal, but protests and evidence will also be accepted by mail and through the drop box located outside the TCAD office (850 East Anderson Lane).
According to TCAD, the informal process will begin April 18th and end June 30th. During that time, taxpayers will have the opportunity to discuss their property with a TCAD appraiser, and may receive a settlement offer. Property owners who do not receive or accept an offer will have the opportunity to present their case to the ARB, which will start its hearings in June.
ARB Chair Craig Phifer told the Bulldog in recent emails that he anticipates formal hearings will kick off June 15th for property owners with disability or veteran’s exemptions. “My goal is to start in earnest with high-value properties on June 21st.”
“We will field 45 panels daily,” Phifer said, “18 of those will be available for in-person hearings, and 27 will be remote either by telephonic or video conference.”
TCAD will be hosting a webinar on the 2022 protest process April 27th at 11:30 a.m. Registration is available at www.traviscad.org/webinars.
Trust indicators: Bulldog reporter Daniel Van Oudenaren is a journalist with 13 years experience in local, state, and international reporting.
Who funds this work? This report was made possible by contributions to The Austin Bulldog, which operates as a 501(c)(3) nonprofit for investigative reporting in the public interest. You can help support this independent coverage by making a tax-deductible contribution.
Related Bulldog coverage:
Luxury real estate to get special tax status under ‘blight’ statute, December 21, 2021
Appraisal district looks to avoid rocky 2022, December 17, 2021
Appraisal rolls certified on time…for a change, December 13, 2021
Council eyes property tax hike above 3.5 percent, June 2, 2021
Rates and Exemptions of All Taxing Units in Travis County (.xlsx) (Travis County Tax Office)
You say “While these tax rates are locked in, property owners may still be able to lower their property tax bill… ”
But we’ve already paid the tax bills based on these locked in tax rates. The whole point, as you correctly state earlier in the article, is that you can’t know your tax bill until the taxing units set their budgets and tax rates and send out bills next October.