Focus on School Taxes
Texas independent school districts (ISDs) reported to the Comptroller's Property Tax Division (PTD) a total of more than $16.3 billion in 2002 school property taxes. This $1.2 billion increase was almost 8 percent above the 2001 total school taxes of $15 billion.
The 2002 average statewide tax rate increased almost five cents above the 2001 average rate. About 11 percent of Texas school districts reduced their local adopted tax rates, 27 percent kept the same rate and the remaining 62 percent of the districts increased their rates.
The 2002 school property value reports are for 1,033 Texas school districts, one less than in 2001. In 2002, Sudan ISD in Lamb County and Three-Way ISD in Bailey County consolidated to form the Sudan Consolidated ISD, reported in Lamb County.
The ISD reports do not include local school taxes by special county equalization districts and South Texas ISD. Tax rates reported are per $100 of property value.
School Tax Rates
The 2002 average statewide tax rate was $1.534 per $100 of value, a 5-cent increase above 2001’s average rate. The 2001 average statewide tax rate was $1.486 per $100 of value, a 1-cent increase above 2000’s average rate. This average rate calculation uses the reported adopted tax rates divided by the number of ISDs reporting. This average does not consider any overall tax value or levy changes resulting in tax rate increases or decreases.
Table 10 provides rate change information for school districts. School boards in 112 districts—about 11 percent—reduced their school tax rates. Some 277 districts—27 percent—kept the same rate as in 2001. Another 644 districts—or 62 percent—saw their tax rates rise from less than 1 percent to almost 67 percent in 2002.
Source: Comptroller's Property Tax Division.
TABLE 10 - 2002 Rate Changes in Texas School Districts Percent Change in Rate from 2001 Number of ISDs Percentage of All ISDs Decreases Less than 1 percent 49 4.7% 1 to 10 percent 57 5.5% More than 10 percent 6 0.6% Subtotal 112 10.8% No Change 277 26.8% Increases Less than 1 percent 68 6.6% 1 to 10 percent 470 45.4% More than 10 percent 106 10.3% Subtotal 644 62.4% Total 1,033 100 %
Table 11 shows the range of school tax rates. The adopted 2002 ISD tax rates ranged from a low of $0.54 per $100 of value in Mirando City ISD in Webb County to a high of $2.00 in Spurger ISD in Tyler County.
Rates are based on $100 of property value.
TABLE 11 - What was the range of 2002 ISD rates in Texas? Total ISD Rate Number of ISDs Percentage of All ISDs Less than $1.00 7 0.7% $1.00 to $1.20 16 1.5% More than $1.20 to $1.40 121 11.7% More than $1.40 to $1.50 331 32.0% More than $1.50 to $1.60 253 24.5% More than $1.60 305 29.5% Total 1,033 100 percent
Source: Comptroller's Property Tax Division.
Only seven districts had adopted tax rates of less than $1.00, compared to 11 districts for tax year 2001. None of these seven districts adopted a rate to pay for debt. About 45 percent of the districts—or 468—had combined rates between $1.00 and $1.50 per $100 of value. The remaining 558 districts, or 54 percent, had rates range from above $1.50 to the high of $2.00.
A school district’s property tax rate may consist of two parts: a maintenance and operations (M&O) rate and an interest and sinking fund (I&S) rate. The M&O rate covers general operating costs. The I&S rate, which is usually called the "debt" rate, is used to repay a district's debt. Some districts have no debt rate.
The state's 2002 average M&O rate for ISDs was $1.431, while ISDs’ debt rate averaged $0.103.
State law places a tax rate cap of $1.50 on M&O rates. In 2002, school boards in 405 ISDs—about 39 percent—adopted an M&O rate at the rate cap, compared to 252 ISDs (about 24 percent) in 2001. Another 34 percent—or 350 districts—have M&O rates between $1.40 and $1.50, compared to 2001 when 340 districts (33 percent) had M&O rates in that range.
Seven school districts in Harris County adopted M&O rates above the $1.50. Spring Branch ISD adopted an M&O rate of $1.60, but the district has authority by voter election for a higher M&O rate cap. The other six districts were Aldine, Deer Park, Galena Park, North Forest, Pasadena and Katy ISDs. Katy ISD is located in both Harris and Waller Counties.
About 30 percent—or 312 districts—do not have a 2002 debt rate for repaying debt obligations. Of the 721 ISDs with debt rates, six districts have a debt rate of more than $0.40. Spurger ISD in Tyler County set the highest debt rate at $0.50. With a M&O rate of $1.50, the district's total rate was $2.00.
School Tax by Property Type
In 2002, Texas residential properties paidalmost 49 percent of the total amount in school taxes. Businesses paid about 44 percent of local school taxes. In 2001, Texas business and residential properties paid about the same total amount in school taxes.
Residential properties have picked up about 2 percent more of the school tax burden, while business properties have dropped about that amount in their percentage of tax burden.
Residential properties — single-family homes, multi-family units and residential inventory — saw school taxes increased just under $886 million to total $7.9 billion . Owners of single-family residences paid almost 43 percent of local school taxes and saw their 2002 school property taxes grow by $818 million. In 2001, single-family residences paid about 41 percent of local school taxes. Residential inventory is residential property held for sale by builders or developers.
Texas businesses paid just under $7.2 billion in 2002 local school taxes, about $226 million more than in 2001. Of all business properties, industrial personal property and oil and gas properties paid less in 2002 taxes than in 2001.
Vacant lots, rural acreage and farm and ranch improvements generated just under 7 percent of local school taxes, or about $1.1 billion, a $74-million increase from 2001.
Table 12 shows Texas properties grouped into 14 categories and then grouped into four main property types: residential, business, acreage/lots/farm and ranch improvements, and other personal property. The fourth type, other personal property, includes privately owned vehicles in school districts where vehicles are taxed. This type represented about one-half of 1 percent of total school taxes at $93 million.
Reported to Comptroller's Property Tax Division by independent school districts (ISDs) in Spring 2002.
Table 12 - School Property Tax Burden - 2001 to 2002 Property Category 2001 School Taxes % of Total 2002 School Taxes % of Total $ Change 2001 to 2002 Residential Property Single-Family Homes $6,168,813,110 40.83 $6,986,748,107 42.87 $817,934,997 Multi-Family Residential $820,830,720 5.43 $881,650,965 5.41 $60,820,245 Residential Inventory $50,704,338 0.34 $57,495,091 0.35 $6,790,753 Subtotal, Residential $7,040,348,168 46.60 $7,925,894,163 48.63 $885,545,995 Acreage/Lots Vacant Lots $402,009,276 2.66 $425,705,461 2.61 $23,696,185 Acreage $375,830,689 2.49 $391,192,738 2.40 $15,362,049 Farm & Ranch Improvements $263,443,317 1.74 $298,179,946 1.83 $34,736,629 Subtotal, Acreage/Lots $1,041,283,282 6.89 $1,115,078,145 6.84 $73,794,863 Business Properties Commercial Real Estate $2,621,397,117 17.35 $2,763,283,713 16.95 $141,886,596 Commercial Personal $1,253,195,870 8.29 $1,257,200,906 7.71 $4,005,036 Industrial Real Estate $1,028,551,949 6.81 $1,065,506,510 6.54 $36,954,561 Industrial Personal $769,134,760 5.09 $767,890,913 4.71 ($1,243,847) Oil & Gas & Minerals $613,446,419 4.06 $612,258,871 3.76 ($1,187,548) Utilities $604,323,022 4.00 $645,155,460 3.96 $40,832,438 Special Inventory $48,529,547 0.32 $53,271,282 0.33 $4,741,735 Subtotal, Business $6,938,578,684 45.92 $7,164,567,655 43.96 $225,988,971 Other Personal Property Vehicles $3,261,345 0.02 $3,441,223 0.02 $179,878 Other Personal $85,293,599 0.56 $89,815,181 0.55 $4,521,582 Subtotal, Other Personal $88,554,944 0.59 $93,256,404 0.57 $4,701,460 Total $15,108,765,078 100.00 $16,298,796,367 100.00 $1,190,031,289
Reports do not include South Texas ISD or county equalization districts.
2002 School District Value Study
Texas school districts’ final taxable property values totaled more than $1 trillion in 2002, an increase of just under 6 percent or about $55 billion from the 2001 property value study. The Comptroller’s office certified the final estimate of school taxable property values — based on the appraisal date of January 1, 2002 — to the Texas Education Commissioner on July 1, 2003.
The Government Code requires the Texas Education Agency to use the Comptroller’s annual estimates of individual school district taxable wealth to determine state aid payments. The Comptroller’s findings in Table 13 are reported in the agency’s 2002 Final Report of School and Appraisal Districts’ Property Value Study.
NOTE: Totals may not add because numbers are rounded.
TABLE 13 - Statewide School District Taxable Values, 2001 to 2002 (in billions) Property Category 2001 Final Value 2002 Final Value % Change 2001-2002 A. Single-Family Residences $497.89 $548.01 10.07% B. Multi-Family Residences $50.93 $53.58 5.20% C. Vacant Lots $24.86 $25.84 3.94% D. Rural Real (Taxable) $48.97 $51.77 5.72% F1. Commercial Real $164.80 $169.03 2.57% F2. Industrial Real $70.41 $70.37 -0.06% G. Oil, Gas, Minerals $44.20 $40.94 -7.38% J. Utilities $39.07 $41.07 5.12% L1. Commercial Personal $85.94 $86.51 0.66% L2. Industrial Personal $56.26 $54.35 -3.39% M. Other Personal $5.08 $5.44 7.09% N. Intangible Personal & Uncertified $2.74 $5.42 97.81% O. Residential Inventory $3.35 $4.20 25.37% S. Special Inventory $3.29 $3.61 9.73% Subtotals $1,097.78 $1,160.15 5.68% Less Total Exemptions $137.39 $144.96 5.51% Total Taxable Value $960.39 $1,015.19 5.71%
Source: Comptroller's Property Tax Division, 2002 Property Value Study
Property Value Trends
Taxable values increased in 804 school districts, with an average increase of more than 10 percent from 2001. Values declined in 248 districts by an average of almost 7 percent. While the state has 1,033 school districts, this total is for 1,052 districts since some school districts are appraised by more than one appraisal district. In these "split districts," the PTD counts these as separate districts for Property Value Study (PVS) purposes.
The final 2002 study, before exemptions, revealed about a 10-percent increase in the value of single-family residences, just under the 2001 increase of 12 percent. This category is the largest in appraised value, representing 47 percent of the total school district tax base.
Multi-family residences values increased more than 5 percent, following a 10-percent increase in 2001.
Changes in business properties’ values varied, depending on the category type. Commercial real property increased more than 2 percent, compared to 8 percent last year. Industrial real property remained the same value, after a 13-percent increase in 2001.
Industrial personal and commercial personal properties took different courses. Industrial personal dropped more than 3 percent (compared to 14 percent increase in 2001) and commercial personal rose slightly at less than 1 percent (compared to an 8-percent increase in 2001).
Utilities increased about 5 percent, after falling almost 4 percent in value in 2001. On the other hand, oil, gas and minerals dropped more than 7 percent after increasing 56 percent in 2001.
Residential inventory, residential property held for sale by the developer, also increased 26 percent, following a 56-percent increase from the 2000 study. Special inventory is the inventory value of motor vehicle, boat, heavy equipment and manufactured housing dealers required to file special reports with appraisal districts and county tax offices; it increased less than 10 percent from the 2001 study.
Intangible personal and uncertified property included miscellaneous properties listed on the local tax rolls but not certified by local appraisal review boards at reporting time. With updated information during the appeals process, Comptroller staff distributed the certified values among other property categories.
Government Code Section 403.302 specifies the exemptions and special appraisals the Comptroller’s office deducts from market value to determine the taxable value of property in school districts. Table 14 shows school districts’ total exemptions and abatements increased more than $7 billion from the previous year.
The 5.5-percent increase resulted from the granting of more state-mandated homestead exemptions and an increase in the loss for the tax limit on homesteads of homeowners age 65 or older. Other exemptions with increasing amounts exempted were for tax increment financing, freeport property and pollution control.
As in past years, the state-mandated homestead exemptions and the taxable value loss for those homes with tax ceilings for qualified homeowners age 65 or older and with value caps account for 86 percent of the deducted amount.
Source: Comptroller's Property Tax Division.
TABLE 14 - Estimates of School District Exemptions and Abatements Certified to Texas Education Agency 2001 Exempt Value (in billions) 2002 Exempt Value (in billions) Homestead & Disabled Vet Exemptions $ 72.86 $75.45 Homestead Cap Value Loss $ 14.70 $14.16 Tax Limit on Over-65 Homesteads $ 34.40 $35.19 Abatements and Others $ 19.29 $20.16 Total $141.25 $144.96