PROPERTY TAXES IN TRAVIS COUNTY
Property Taxes in Travis County What is the cost of local governments to the average Austin household? The Real Estate Council of Austin, Inc. (RECA) conducts an "Austin Combined Cost of Governments Index" study each year. RECA created the index as a tool to track local tax trends and compare them to typical household income growth. The index looks at the taxing rates of the Austin Community College (ACC), Austin Independent School District (Austin ISD), Capital Metro, the City of Austin, Travis County, and Central Health (formerly called the Travis County Hospital District.) The results for the year 2010 show income for a typical family of four inched up by 0.7 percent to $73,800 in 2010, compared to a whopping 6.9 percent increase in the annual tax burden per household, now at $6,500, up from $6,082 in 2009. The overall tax burden for a family of four is 8.8 percent of their total income. During the past 21 years, median income for typical Austin area families has doubled. from $36,325 to $73,800, while the combined cost of governments has tripled, from $2,130 to $6,500. Since 1989, median income for a typical family of four increased 103.2 percent while the accumulated costs of schools, roads, emergency services, jails, and other services increased 205.2 percent. It is a 21-year trend that shows intermittent signs of slowing, but then picks up again. How is the Amount of Property Tax I Pay Calculated and What Can I Do About It? Formula : VALUE X RATE = TAX Taxable value of your property X the tax rate for each jurisdiction = the property tax you must pay on the real estate property you own While many times citizens pay close attention to property values, the other side of the equation--the tax rate--is equally as important. Property values are only one piece of the property tax puzzle. Each year, local taxing authorities, such as the Board of Trustees of the AISD or the Austin City Council, set property tax rates for all real estate within their taxing jurisdictions. Most Travis County residents pay property taxes to five authorities: ACC, Austin ISD, the City of Austin, Travis County, and Central Health. These tax rates are set after each authority examines the needs of operating budgets and debt payment in relation to the total taxable value of properties located in the taxing unit’s jurisdiction. During the budgetary process, taxing authorities conduct public hearings between August and September, which include discussions regarding setting the upcoming fiscal property tax rate. If you are interested in how much you pay in property taxes, you should participate in the budget process to assure that the tax rate for each taxing jurisdiction is appropriately set. Tax Rates (per $100 of valuation) Taxing Authority ACC Austin ISD City of Austin Travis County Central Health 2001 0.0500 1.5486 0.4597 0.4460 N/A 2002 0.0500 1.5964 0.4597 0.4660 N/A 2003 0.0771 1.6137 0.4928 0.4918 N/A 2004 0.0900 1.6230 0.4430 0.4872 0.0779 2005 0.1000 1.6230 0.4430 0.4872 0.0779 2006 0.0965 1.4930 0.4126 0.4499 0.0734 2007 0.0958 1.1630 0.4034 0.4216 0.0693 2008 0.0954 1.2020* 0.4028 0.4006 0.0679 2009 0.0946 1.2020 0.4209 0.4215 0.0674 2010 0.0951 1.227 0.4571 0.4658 0.0719 2011 0.0948 1.242 0.4811 0.4855 0.0789 *Required aTax Ratification Election on November 4, 2008 Below is contact information on the major taxing jurisdictions in Travis County and the schedules for the 2011 hearings. Please note that the Travis County Commissioners Court sets the property tax rate for Central Health (formerly Travis County Hospital District). Taxing Authority ACC Austin ISD City of Austin Travis County Central Health Budget/Tax Rate Hearings Scheduled Public Hearing: June 20 at 6:00 p.m. Public Hearing: August 18 at 7:00 p.m. Public Hearings: July 27 and August 17, and 24 at tba Public Hearing: Sept. 20 and 23 at time tba Public Hearing: August 25 at 5:30 p.m. and Sept. 1 at 6:30 p.m. Contact Number 223-7613 Pat Stubbs 414-2263 Steve West 974-2610 Greg Canally 854-9106 Rodney Rhodes 978-8151 Carolyn Konecny Address Highland Business Center Rm #201 5930 Middle Fiskville Rd. 1111 W. 6th Street City Council Hall, Council Chambers, 301 W. 2nd Street Commissioners Court, 314 W. 11th Commissioners Court, 314 W. 11th Consider for Approval July 5 at 6:00 p.m. August 22 at 7:00 p.m. Sept. 12, 13, and 14 at 10:00 a.m. Sept. 27 at time tba Sept. 8 at 5:30 p.m.   How is Property Value Determined and What Can I Do About It? The Travis Central Appraisal District (TCAD) determines the market value of your property using the following process: January - May 2011: The Travis County Appraiser determines property values as of January 1st based on recent market data and cost or property income data from the previous year. TCAD sends notice of appraised value to property owners by May 31st. June - July 2011: The appraisal roll is finalized by TCAD, and those rolls are turned over to each taxing authority. (This must occur before the jurisdictions begin their budget hearings.) August - Sept 2011: Each taxing authority begins working on the next fiscal budget, which includes setting the tax rates. October - November 2011: Property tax bills are mailed to property owners or mortgage companies. January 31, 2012: Last date to submit tax payment before accruing penalties, interest or legal action.   What you can do about it? If you disagree with the taxable value of your property and wish to protest, you may do so by filing a written protest. The appraisal district has protest forms available, but you need not use an official form. A notice of protest is sufficient if it identifies the owner, the property that is the subject of the protest and indicates that you are dissatisfied with a decision made by the appraisal district. You must file your notice of protest by May 31 or no later than 30 days after the appraisal district delivers a notice of appraised value to you, whichever date is later. If you do not file a notice of protest before the statutory deadlines, you lose your right to protest. You also lose the right to file a lawsuit about the taxable value of your property. If you are concerned about how much you pay in property taxes, you should be sure the value of your property is properly assessed. Click here for more information about the local property tax process; and click here for information about protesting your appraisal. Who Decides How Public Schools are Financed? The state law that governed school finance, which required school districts that are classified as "property wealthy," such as Austin ISD, to send substantial funding to the State of Texas to be used for the benefit of "property poor" school districts, was referred to as the "Robin Hood" plan. While the state's financial commitment to fund public education had fallen to about 40 percent of the total cost, Austin schools, categorized as "property wealthy," received virtually no state aid. In  fiscal year 2009, the State of Texas required Austin ISD to send $177 million to State coffers, up $60 million from a year earlier. "Recapture" accounts for about 13 percent of the Austin ISD annual budget. It became apparent to many policymakers, including school district officials and to the public, that this antiquated method of financing public schools needed improving, with the State shouldering more of the public school finance burden. A number of steps have been taken to address school financing. On September 15, 2004, District Judge John Dietz declared the so-called "Robin Hood" plan unconstitutional. Judge Dietz stated that the current school financing system did not allow local districts to maintain meaningful discretion over their budgets due to both a capped property tax rate and funds transfers from "property-rich" districts to "property-poor" districts. On November 22, 2005, the Texas Supreme Court determined that the amount of money spent per student is constitutional, at this time, to provide the constitutionally guaranteed "general diffusion of knowledge." The Court also determined that most local school districts must tax property at the state maximum $1.50 per $100 valuation to provide the "general diffusion of knowledge," which has created a de facto and unconstitutional statewide property tax. Governor Rick Perry called a special session to address the Court's ruling. The 3rd Special Session of the 79th Texas Legislature, which adjourned May 15, 2006, was dedicated almost exclusively to reworking school finance in Texas, to include developing a new business tax structure. Highlights from the session included: A 33% reduction of school district O&M rate by 2008; A $2,000 per teacher pay raise; Expansion of the franchise tax (1%) to most businesses; $1 per pack tax increase on cigarettes; and Mandate the report of accurate sales price for used cars to tax assessor for calculating sales taxes The new business tax structure took effect in 2008. The Texas Legislature, which convened in January 2007, considered technical changes to the new business tax, which also took effect in 2008. 80th Texas Legislature (2007): House Bill 3928 by Representative Jim Keffer (R-Eastland) and Senator Steve Ogden (R-Bryan) was designed to clean up the business tax that the Legislature passed in special session in 2006. The bill clarified that capital gains from the sale of real property are included in the income that is subject to the 90% test for a passive entity. In addition, the bill modified the calculation of tax for small businesses with total revenue between $300,000 and $900,000 by applying a sliding discount scale ranging from an 80 percent discount for taxable entities with total revenue less than $400,000 to a 20 percent discount for taxable entities with total revenue greater than $700,000 but less than $900,000. Under previous law, taxable entities with total revenue of less than $300,000 owe no tax. The bill also provided an optional alternative method for calculating tax for businesses with total revenue of $10 million or less. A qualified taxable entity would calculate tax by multiplying apportioned total revenue by 0.575 percent. A taxable entity electing this calculation would be eligible for the discounts for taxable entities with total revenue less than $900,000, but could not use tax credits or other adjustments. Partnerships are required to include gross rental income instead of net rental income in determining total revenue. 81st Texas Legislature (2009): House Bill 4765, by Representative Rene Oliveira (D-Brownsville) and Senator Dan Patrick (R-Houston), increased the small business tax exemption from businesses making less than $300,000 to those making less than $1 million for tax years 2009 and 2010, for returns filed in 2010 and 2011. The effect of this bill is to remove the franchise tax burden on approximately 40,000 businesses that paid franchise tax in 2008. The exemption will be dropped to $600,000 in 2011 for returns filed in 2012. On Monday, November 28, 2011, the Texas Supreme Court ruled on a claim by Allcat Claims Service LP, a Boerne insurance adjustment firm, arguing that the franchise tax levied against the partnership reduced the income of its partners, making it an income tax. The Court ruled that the business tax that took effect in 2008, the franchise (or margins) tax, did not violate the state constitution. The Texas Legislature specified in the law instituting the franchise tax that any challenge to it would go directly to the Supreme Court, which was required to rule within 120 days of the case being filed. In its ruling on the case filed in the summer, the Court maintained that the tax applied to the partnership and not the partners, and therefore, did not run afoul of a state constitutional provision prohibiting a personal income tax unless voters give their approval. Future sessions of the Texas Legislature will consider modifications to this tax, which has fallen short of original projections, and is the major source of state revenue that pays for schools, prisons, and other basic functions.
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