Costly Paper Property Wealth

With notices of property values rising significantly, Bosque County Tax Forum offers insights into concerns over property tax increases

CLIFTON – When people received the most recent property tax notice in their mail or post office box, many Texas residents could not believe what they were seeing. To put it mildly, they were unpleasantly surprised.

According to the statements, the amount of taxes owed was up to twice the amount of previous years for many residents. And not surprisingly, this led to a high volume of phone calls to elected officials at county and city level, as well as the appraisal district offices.

In an effort to offer some insight on the tax notices and consequences of the higher property values, a Bosque County Taxpayers Forum was organized by the Bosque County Republican Club with Pastor John Kennedy as moderator, featuring Clifton native and former city administrator Jerry Golden, along with officials from the Bosque County Central Appraisal District (BCCAD) and the County.

At the forum held at the Clifton Civic Center Aug. 3, Golden explained to about 100 people – mainly concerned citizens – how a home value increase may not lead to an insurmountable amount in property taxes. Bosque County Central Appraisal District Chief Appraiser Chris Moser, Bosque County Judge Cindy Vanlandingham and Bosque County Commissioner Pct. 4 Ronny Liardon were also on hand to welcome the audience and offer answers to citizens after the presentation.

While this article attempts to present a nuts and bolts summary of the information presented, was at hand to tape a video recording for those not able to attend. The full presentation can be viewed on Vimeo:

The reasons why the tax notice – which is not the final tax bill – was so high were three-fold:

  • The present real estate market has high demand and very little supply, driving up property values; There are increases of almost 30 percent on average in market sales alone, according to the BCCAD website. Raw land on average doubled in the past year.
  • There is a re-evaluation of properties by the appraisal districts accounting for higher property values; A State Comptroller’s Property Value Study showed BCCAD was well below required appraisal levels - single family homes were at 91 percent of sales prices and rural homes were at 87 percent. In 2020, North Bosque was re-evaluated which includes Meridian, Iredell and Cranfills Gap. Clifton and Valley Mills are being reassessed this year, and Kopperl, Morgan and Walnut Springs next year.
  • The estimated tax amount on the notice is based on last year’s tax rates. The 2019 SB 2 Bill – the Texas Property Tax Reform and Transparency Act - limits the amount of increase in Maintenance and Operations tax revenue for taxing entities from one year to the next. M&O covers everything from salaries, benefits, buildings and equipment. Golden explained that the tax revenue cannot exceed a 3.5 percent increase, without going to vote in a November election. [It is 2.5 percent for schools districts and 8 percent for hospitals and junior colleges].

So, with the increase in property values, taxing entities would have to lower their tax rates, so not to exceed the 3.5 percent increase in M&O revenue – thus changing the tax amount on the final tax bill people can expect in September/October.

Many people see the appraisal district as the party to blame. The appraisal district does not raise your taxes, Golden said in his introduction. They assess the taxable value of the properties. It is the taxing entities like the county, the city, the independent school district, the emergency services district, the hospital district and the Middle Trinity water conservation district set the tax rates.

“It couldn’t come at a worse time for the appraisal district to raise values, but we must do it to avoid the loss of school funding,” Chief Appraiser Chris Moser said. “Some people have thought that the pandemic would reduce the price of real estate, but the opposite is happening.

“The significant drop of mortgage rates driven by the Federal Reserve’s lowering of base rates has increased the demand for housing. In addition, many city dwellers are looking at smaller communities since they are working from home which is also significantly increasing the price and demand for housing.”

On the tax notice, people will see two values of their property. The market value is the amount which a property is likely to sell based on the condition of the home and value of surrounding properties. The assessment value is the property’s taxable value. It is the market value, minus any homestead cap limitations and tax exemptions.

Moser urged everyone that is eligible for one tax exemption or another – like a homestead, disability of over-65 – should definitely apply for them. In this time of increasing values, exemptions cap tax amount increases or the taxable amount. He also encouraged people with any questions about their individual notices to contact the BCCAD directly.

Property tax dollars are used to fund community services like public schools, infrastructure projects, police and fire departments, and other local services. Some people in the audience Aug. 3, understand this, but feel that they are not seeing their tax dollars at work; but that is a whole different discussion which citizens need to conduct at the level of taxing entity board meetings.


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