Houston's property tax "cut" (wink, wink)

City Council voted to cut Houston's property tax rate on Wednesday and Matt Stiles reported on the disagreement over whether or not it's really a tax cut:

The council cut the city's tax rate by a quarter of a penny. But a new state law, passed with the goal of increasing elected officials' accountability to homeowners, forced the council to declare formally that it had raised taxes, since rising property values will bring in more city revenue.

The new rate 64.75 cents per $100 valuation means the owner of a $100,000 assessed house will pay the city $518 in annual property taxes with a typical 20 percent homestead exemption. The previous rate was 65 cents per $100 valuation, under which that homeowner would have paid $520.

The vote came after a contentious, 90-minute debate about whether the action amounted to a tax cut or whether it was an increase.

"Ultimately, there will be some people whose taxes go up and some people whose taxes go down, because of the actions of the appraisal district, not the city," Mayor Bill White said.

The appraisal district determines the market value of property for taxation.

As Edd Hendee and Paul Bettencourt pointed out yesterday on Edd's morning show, the mayor is being disingenuous. He knows full well what the city's funding wants are and he knows how much the average homeowner's bill will rise each year to help fund the city's wants -- eight to ten percent -- so for him to say that the appraisal district is the bad guy and not the city, well, he knows better. But, of course, he hopes the average Houston homeowner will fall for it and not blame him.

Council members Shelley Sekula-Gibbs and Addie Wiseman voted against the rate cut, saying that it was, indeed, an increase. They also said it didn't provide enough tax relief.

Sekula-Gibbs proposed a new rate of 64.17 cents per $100 valuation. That figure, she said, represented the "effective" tax rate, the amount that would keep revenue level with the previous year minus new appraised properties or exceptions.

The council, by a 10-5 margin, voted against considering her plan, which would have reduced the city's revenue for the current fiscal year by about $9 million, she said.

Wiseman, who had tense exchanges with White and others on the council, was adamant that the panel had increased taxes. She forced Councilman Adrian Garcia, who read the motion with the language required by the state law, to repeat the phrase twice.

"The decision here is to raise taxes, but by a smaller amount," said Wiseman, who later issued a news release describing her "outrage."

The debate grew so tense that Councilwoman Ada Edwards at one point interrupted, saying, "Ms. Wiseman, this is not your meeting. You have to have some respect for the decorum of this body."

The decorum, the process, the tradition. True politicians always value those things above any real substantive debate and action. No rocking the boat!

Good for Councilmembers Wiseman and Sekula-Gibbs. Texas homeowners ARE being run over, trampled on and spit upon, due to this state's broken taxation system. How much longer can governmental bureaucracies strangle the golden goose? We are going to find out.

Sedosi has some thoughts on this looming trainwreck:

The Municipalities? As seen here they are quite comfortable taking in 5-10% revenue increases annually while having a convenient scapegoat on hand to blame for rising tax values.

[snip]

The fact is next year the City of Houston will get a pay raise from taxpayers at a rate that is higher than the Cost of Living Index and population growth. Most of this increase will come on the backs of property owners who are already struggling under increased fuel and food prices.

Some will say that this isn't a problem, that the "issue" is Conservatives wanting to give more to the rich.

Except its not the rich that are going to be forced out of their homes, it's the poor and middle class that are feeling the crunch the hardest.

I would only add to those on-target points that even with a 65-exemption, many of Texas' retired homeowners cannot indefinitely afford property tax bills that increase much faster than their retirement funds do. Soon, very soon, Texas' system will have to be fixed and hard choices will have to be made. Unfortunately, many politicians prefer the ostrich-approach.

RELATED: Doug Miller's (KHOU-11) coverage, which gives the mayor and the city a pass. Miller needs some educatin' on Texas' property tax system with statements like this:

But of course, Houston's booming housing market brings higher home prices and higher home prices generally bring homeowners higher property tax bills.

No. On average Houston-area homes sell for eleven percent under fair market value. Which means that Houston homes are "worth" more than they are selling for. How did they get that higher worth? Appraisal increases that have nothing to do with a home's true worth! Appraisal increases, instead, are based on government funding wants.

Posted by Anne Linehan @ 10/28/05 07:49 AM | Print |

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