Part I:
Property Taxes StatewideIn tax year 2003, 3,702 local taxing units levied almost $29 billion in property taxes, just under 6 percent more than in 2002.
The Texas Constitution authorizes local governments to levy property taxes. Local governments include counties, school districts, cities and special districts such as junior colleges, hospitals, utilities, flood control and rural fire districts.
In each of the state's 254 counties, a single appraisal district determines the appraised value of taxable property. Potter and Randall County Appraisal Districts have formed a single appraisal office in Amarillo. Local governments, commonly-called taxing units, levy property taxes based on the property values set by the county appraisal districts.
Table 1 shows that taxing units by type increased property taxes from 5 to 8 percent from 2002. School property taxes—imposed by 1,031 independent school districts and representing about 60 percent of total property taxes—totaled almost $17.3 billion in 2003. Nine new cities pushed the number of taxing cities to 1,040 and increased city property taxes to exceed $4.4 billion. County property taxes topped $4.1 billion in 2003. The levy of special districts rose by 8 percent to pass $3 billion, with 40 new special districts levying a property tax.
Totals may not add due to rounding.
Table 1 - Property Taxes Reported by Unit Type - 2002 vs. 2003 Tax Year 2002 Tax Year 2003 Unit Type No. of Units Tax Levy % Tax Levy No. of Units Tax Levy % Tax Levy % Increase School districts* 1.033 $16,418,788,831 60.1% 1,031 $17,264,153,972 59.8% 5.1% Cities 1,031 $4,186,795,363 15.3% 1,040 $4,415,212,819 15.3% 5.5% Counties 254 $3,849,728,346 14.1% 254 $4,121,758,950 14.3% 7.1% Special districts 1,337 $2,864,454,984 10.5% 1,377 $3,092,285,295 10.7% 8.0% Total 3,655 $27,319,767,524 100.0% 3,702 $28,893,411,036 100.0% 5.8% *Includes: County Equalization $26,870,618 $27,559,332 South Texas ISD $9,140,424 $10,527,193
School district consolidations occurred from 2002 to 2003.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Property Tax GrowthTable 2 shows the growth in property tax levies by the four major types of taxing units since 1985. Comparing tax years 1985 and 2003, the total of all taxing units' property taxes grew 222 percent.
*1991 and 1992 include County Education Districts.
Table 2 – Growth of the Property Tax by Unit Type, 1985 – 2003 Tax Year Special District
LevyCounty Levy City Levy School Levy Total Property
Tax Levy1985 $1,056,802,000 $1,427,755,000 $1,820,345,000 $ 4,663,892,000 $ 8,968,794,000 1986 $1,141,652,000 $1,482,295,000 $1,966,674,000 $ 5,026,592,000 $ 9,617,213,000 1987 $1,176,667,000 $1,539,953,000 $2,028,743,000 $ 5,218,820,000 $ 9,964,183,000 1988 $1,232,415,000 $1,595,183,000 $2,145,726,000 $ 5,575,843,000 $10,549,167,000 1989 $1,284,165,144 $1,715,691,860 $2,200,415,156 $ 6,072,227,279 $11,272,499,439 1990 $1,354,607,273 $1,743,176,612 $2,218,971,749 $ 6,605,433,619 $11,922,189,253 1991* $1,459,643,501 $1,894,013,461 $2,303,609,801 $ 7,566,042,099* $13,223,308,862 1992* $1,492,043,534 $1,996,116,460 $2,311,630,199 $ 8,181,309,478* $13,981,099,671 1993 $1,535,769,813 $2,176,974,573 $2,362,404,482 $ 8,681,859,148 $14,757,008,016 1994 $1,620,504,796 $2,311,389,149 $2,493,554,910 $ 9,024,885,601 $15,450,334,456 1995 $1,628,217,607 $2,391,961,283 $2,596,742,540 $ 9,340,994,056 $15,957,915,486 1996 $1,698,557,436 $2,537,183,937 $2,701,214,386 $ 9,910,195,171 $16,847,150,930 1997 $1,759,622,591 $2,658,308,076 $2,847,081,480 $10,394,500,372 $17,659,512,519 1998 $1,889,138,306 $2,828,286,927 $3,005,996,060 $11,334,614,289 $19,058,035,582 1999 $2,041,041,011 $2,979,279,400 $3,247,964,177 $12,009,923,498 $20,278,208,086 2000 $2,389,110,312 $3,200,919,731 $3,530,863,516 $13,392,336,012 $22,513,229,571 2001 $2,703,512,059 $3,566,857,130 $3,884,829,249 $15,155,217,587 $25,310,416,025 2002 $2,864,454,984 $3,849,728,346 $4,186,795,363 $16,418,788,831 $27,319,767,524 2003 $3,092,285,295 $4,121,758,950 $4,415,212,819 $17,264,153,972 $28,893,411,036
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Property Taxes vs. Other TaxesWhen examining how large a role property taxes play compared to other state and local taxes, it is important to remember that different collection cycles exist. The analysis shown in Figure A looks at 2002 property taxes of $27 billion, which local governments spent in calendar year 2003, versus state and other local taxes collected and spent in fiscal 2003, which ended August 31, 2003. Table 3 compares fiscal 2002 and fiscal 2003, which ended August 31, 2003.
Using this comparison basis, major state and local sales taxes and property taxes in 2003 totaled more than $57 billion. Property taxes remained the single largest type of tax at almost 48 percent of this total.
State sales taxes, the next largest revenue source at $14 billion, represented 25 percent of the total. When combined with other state taxes, such as motor fuels and motor vehicle taxes, the franchise tax, oil and gas severance taxes, "sin" taxes and others, the state's share of the total tax levy is just under 46 percent.
Local city and county sales taxes, along with metropolitan transit authority (MTA) taxes, were almost 7 percent of the total.
* Uses the 2001 local property tax levy that local governments spent in fiscal 2002. Includes other local taxes as well as the major state taxes, which were collected and spent in fiscal 2002, ending August 31, 2002.
Table 3: State and Local Sales and Property Taxes as a Percentage of Total Major Taxes Type of Tax Tax Amount for Fiscal 2002* Percent of Total Tax Amount for Fiscal 2003** Percent of Total Property Tax $25,310,416,025 45.6% $27,319,767,524 47.6% State Sales Tax $14,516,341,226 26.1% $14,277,286,162 24.9% Other State Taxes $11,762,805,267 21.2% $11,849,389,262 20.7% Local Sales Taxes*** $3,970,173,894 7.1% $3,914,416,742 6.8% Total Taxes $55,559,736,412 100.0% $57,360,859,690 100.0%
** Uses the 2002 local property tax levy that local governments spent in fiscal 2003. Includes other local taxes as well as the major state taxes, which were collected and spent in fiscal 2003, ending August 31, 2003.
** Does not include local utility, hotel/motel, mixed beverage and other taxes.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Tax Rate Rollback ActivityLocal voters may limit adopted tax rates, if local taxing units adopt tax rates above their rollback tax rates. Local voters in two of seven taxing units limited their 2003 adopted tax rate. They were Kinney County and the City of Laguna Vista in Cameron County.
For the preceding tax year, five out of eight taxing units had to limit their tax rates after elections on their 2002 tax rates.
The rollback tax rate is a calculated maximum rate allowed by law without voter approval. The rollback rate provides the taxing unit with about the same amount of tax revenue it spent the previous year for day-to-day operations, plus an extra 8 percent increase for those operations plus sufficient funds to pay debts in the coming year. For school districts, the extra increase is $0.06 per $100 of property value, rather than 8 percent, based on different calculation steps.
If a local taxing unit other than a school district adopts a tax rate above the rollback rate, local voters may petition for an election to roll back the adopted tax rate to the calculated rollback tax rate. The law requires that the petition must be signed by at least 10 percent of the registered voters shown on the most recent official voters list for the taxing unit.
A school district that adopts a tax rate above the rollback rate must hold a rollback election between 30 and 90 days after the rate is adopted. No petition by citizens is required. The school district’s election differs from other types of units in that voters are asked to ratify their school’s adopted tax rate. If a simple majority of the votes cast in the election favor the adopted tax rate, then the adopted rate stands. If the voters disapprove the adopted rate, the school district’s rollback rate becomes the adopted tax rate. After the outcome of the election, school tax bills are mailed.
Four independent school districts (ISDs) had voters ratify their 2003 tax rates that exceeded their rollback rates. The ISDs where voters approved a higher tax rate included Borden ISD in Borden County, Industrial ISD in Jackson County, Mirando City ISD in Webb County and Silverton ISD in Briscoe County.
Voters in the Concho County Hospital District decided not to roll back the 2003 tax rate, and the hospital retained its 2003 adopted tax rate.
One taxing unit held that the submitted rollback petition was invalid. The city council of Belton in Bell County held that the rollback petition signatures were not verified and the petition did not comply with its city charter.
Table 4 lists the taxing units, with the election date, election results, the adopted tax rate, the rollback tax rate and the percentage the adopted tax rate exceeded the district’s rollback rate. Tax rates are per $100 of value.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Table 4 - Taxing Units that Exempt Freeport Property Taxing Unit and
Election DateCounty Election Results 2003 Tax Rate Rollback Rate/
% IncreaseSchool District Borden ISD
9/27/03Borden Ratified
For - 136
Against - 101.45 1.36/6% Industrial ISD
9/13/03Jackson Ratified
For - 256
Against - 2251.9387 1.6155/20% Mirando City ISD
11/4/03Webb Ratified
For - 76
Against - 41.50 1.288/16% Silverton ISD
11/4/03Briscoe Ratified
For - 388
Against - 271.30 1.12/16% County Kinney
2/7/04Kinney Rollback Passed
For - 384
Against - 98.8393
old rate - .87.8393/4% City Laguna Vista
2/7/04Cameron Rollback Passed
For - 165
Against - 97.2275
old rate - .2507.2275/10% Special District Concho County Hospital District
5/15/04Concho Rollback Failed
Against - 451
For - 239.3763 .2981/26% Table 5 gives the history of rollback elections since they began in 1982.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Table 5 - History of Rollback Elections That Passed, 1982 - 2003 Tax Year School Districts Counties Cities Special Districts Total 1982 11 of 24 6 of 6 2 of 3 2 of 2 21 of 35 1983 2 of 4 4 of 4 0 of 1 0 6 of 9 1984 0 of 3 1 of 1 4 of 4 0 of 1 5 of 9 1985 1 of 1 4 of 4 3 of 5 0 8 of 10 1986 2 of 4 2 of 2 2 of 3 1 of 2 7 of 11 1987 2 of 9 1 of 1 3 of 7 3 of 5 9 of 22 1988 4 of 12 3 of 3 4 of 7 1 of 2 12 of 24 1989 10 of 23 4 of 6 6 of 7 1 of 2 21 of 38 1990 6 of 11 3 of 4 2 of 4 3 of 5 14 of 24 1991 1 of 1 2 of 2 2 of 4 1 of 1 6 of 8 1992 0 0 of 1 3 of 3 0 of 1 3 of 5 1993 0 of 3 1 of 2 2 of 2 0 3 of 7 1994 1 of 2 1 of 2 3 of 3 1 of 1 6 of 8 1995 0 of 2 0 1 of 4 0 1 of 6 1996 1 of 3 0 1 of 4 2 of 2 4 of 9 1997 0 0 1 of 1 0 1 of 1 1998 2 of 4 0 2 of 3 0 4 of 7 1999 3 of 11 0 0 of 1 0 of 1 3 of 13 2000 2 of 11 2 of 2 2 of 2 0 of 1 6 of 16 2001 2 of 30 0 of 1 1 of 2 1 of 1 4 of 34 2002 3 of 5 0 of 0 2 of 3 0 of 0 5 of 8 2003 0 of 4 1 of 1 1 of 1 0 of 1 2 of 7 Total 53 of 167 35 of 42 47 of 74 16 of 28 151 of 311 Percentage 32% 83% 63.5% 57% 49%
Freeport ExemptionIn 1990, school districts, counties, cities and junior college districts gained the right to choose whether or not to tax freeport property. Tax Code Section 11.251 defines freeport property as goods held in Texas temporarily for up to 175 days for assembling, processing, manufacturing, storage or other purposes.
Texas law was patterned after the federal law on goods coming into U.S. ports and not taxed since they were "free" from a port or tax location. In 1989, the Texas Legislature passed Tax Code Section 11.251 titled "Tangible Personal Property Exempt" but no one called it that. With the term "freeport goods" in the first subsection, taxpayers and local tax officials refer to it as the freeport exemption.
While the vast majority of school districts, counties, cities and junior college districts continue to tax freeport property, the number of these units that exempt freeport property from taxation increased by 25 taxing units to 297 units in tax year 2003. The amount of value exempted for these taxing units increased by $0.5 billion, or about 2 percent.
Some junior college districts also exempt freeport property, but the Texas Comptroller’s Property Tax Division does not collect data from these entities for that information. State law requires other special districts, such as water districts or hospital districts, to exempt freeport property.
Table 6 lists the total exempted value by counties, cities and school districts for the freeport exemption for 2002 and 2003. Table 7 lists the freeport value loss by county, Table 8 lists the freeport loss by city and Table 9 lists the freeport value loss by school district.
* State law provided that counties, cities and school districts had a choice to tax or exempt freeport property.
Table 6 - Taxing Units That Exempt Freeport Property Types of Taxing Units That Exempt Freeport Property * 2002 Number of Units 2002 Taxable Value Loss 2003 Number of Units 2003 Taxable Value Loss County 46 $ 10.3 billion 49 $10.1 billion City 115 $9.6 billion 127 $9.7 billion School District 113 $10.0 billion 121 $10.8 billion Total 274 $29.9 billion 297 $30.6 billion
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Table 7 - 2003 Freeport Value Loss by County County Freeport Value Loss Anderson $19,781,733 Angelina 28,466,815 Archer 1,004,630 Bastrop 6,422,669 Bexar 285,549,530 Bosque 1,016,670 Brazos 18,601,457 Burnet 7,539,173 Coleman 901,130 Collin 542,322,489 Dallas 2,367,237,702 Delta 7,452,426 Denton 784,083,218 Eastland 4,511,540 El Paso 1,089,251,388 Foard 736,720 Gray 10,659,069 Grayson 102,815,597 Guadalupe 84,247,340 Harrison 57,838,688 Hidalgo 300,330,739 Hill 2,016,095 Hutchinson 6,705,730 Kaufman 49,435,690 Kendall 7,604,960 Lamar 74,634,750 Lubbock 44,742,924 Maverick 23,467,260 McLennan 113,188,320 Milam 9,344,980 Montgomery 72,609,002 Palo Pinto 10,975,240 Parker 152,860 Potter 106,915,652 Randall 45,256,588 Rockwall 10,670,039 Runnels 13,099,470 Rusk 3,774,110 Smith 197,062,596 Tarrant 2,473,468,078 Titus 7,551,001 Tom Green 31,424,877 Travis 811,315,897 Val Verde 52,063,610 Walker 1,789,683 Webb 154,117,600 Wharton 7,607,170 Wichita 81,997,378 Young 5,197,469 Total (49 Counties) $10,138,959,752
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Table 8 - 2003 Freeport Value Loss by City City Freeport Value Loss Allen $71,486,620 Amarillo 51,376,368 Anthony 368,556 Arlington 135,046,582 Atlanta 2,036,530 Austin 593,137,213 Azle 202,942 Balch Springs 305,026 Ballinger 7,226,550 Bee Cave, Village of 39,084 Bellmead 106,520 Boerne 3,762,000 Brookshire 8,128,021 Brownsville 83,028,343 Bryan 8,921,172 Buda 2,115,658 Burkburnett 6,201,542 Canyon 422,627 Cedar Hill 3,764,122 Cedar Park 4,787,002 Clarksville 6,403,570 Clifton 1,016,670 Clute 443,090 Coleman 901,130 College Station 7,289,944 Combes 283,728 Converse 2,313,470 Cooper 7,145,001 Coppell 88,993,060 Corpus Christi 18,743,578 Crowell 736,720 Dallas 940,818,976 Dalworthington Gardens 451,507 Del Rio 13,378,990 Denison 43,528,600 Denton 140,570,428 Diboll 3,623,530 Eagle Pass 18,093,830 El Paso 1,003,542,606 Euless 1,280,980 Farmersville 867,367 Flower Mound 2,421,570 Fort Worth 1,643,679,658 Frisco 8,325,877 Gainesville 12,352,967 Galveston 126,090 Garland 213,696,660 Georgetown 14,048,691 Graham 3,560,584 Grand Prairie 203,065,898 Grapevine 546,749,654 Haltom City 18,155,232 Harlingen 17,294,219 Haslet 41,245,351 Henderson 3,774,110 Hillsboro 1,896,095 Horizon 1,771,991 Houston 973,131,930 Howe 467,418 Huntsville 1,253,449 Iowa Park 47,828,946 Kennedale 9,652,219 Kerrville 4,762,000 La Marque 10,560 Lakeway Village 169,250 Lancaster 25,252,400 Laredo 154,117,600 League City 5,943,720 Leander 1,399,688 Lewisville 155,199,942 Lubbock 39,537,833 Lufkin 11,628,281 Mansfield 46,076,060 Marble Falls 46,893 Marshall 2,882,077 McAllen 122,118,237 McGregor 12,033,710 McKinney 229,596,396 Mesquite 66,400,906 Midlothian 68,023,486 Mineral Wells 15,430,340 Mission 21,824,223 Muenster 68,621 North Richland Hills 246,723 Nacogdoches 20,028,050 Palestine 17,602,283 Paris 72,684,280 Pearland 15,832,280 Pharr 765,295 Plano 177,091,032 Ponder 53,000 Port Aransas 715,282 Red Oak 370,250 Reno 1,950,470 Richland Hills 5,781,885 Roanoke 113,662,249 Rockwall 10,670,039 Rosenberg 378,790 Round Rock 72,082,474 Rowlett 594,208 Saginaw 43,212,199 San Angelo 20,602,898 San Antonio 275,052,730 San Benito 1,218,566 Sanger 9,191,902 Schertz 7,765,699 Seguin 43,723,126 Selma 32,318,447 Shenandoah 435,239 Sherman 55,126,584 Socorro 50,994,252 Southlake 3,044,049 Southmayd 557,397 Stafford 132,087,850 Stephenville 44,797,917 Sunnyvale 35,707,527 Taylor 15,771,717 Terrell 47,289,528 The Colony 1,066,094 Tyler 114,908,804 Waco 99,271,140 Waxahachie 70,593,663 Wichita Falls 41,627,404 Willis 1,946,098 Winnsboro 922,690 Winters 5,872,920 Woodway 583,910 Total (127 cities) $9,696,109,025
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.
Table 9 - 2003 Freeport Value Loss by School District (ISD) School District (ISD) Freeport Value Loss Alamo Heights $2,224,480 Aldine 302,945,680 Aledo 8,650 Alief 25,174,240 Allen 71,486,620 Amarillo 31,521,746 Archer City 1,004,630 Arlington 319,437,197 Arp 10,812 Ballinger 7,226,550 Bastrop 6,422,669 Birdville 61,736,948 Boerne 7,604,960 Borger 3,298,940 Brazosport 192,713,380 Brownsville 94,871,669 Burkburnett 19,228,240 Burnet Consolidated 6,251,484 Canutillo 51,058,313 Canyon 40,830,905 Cedar Hill 3,764,122 Chapel Hill 250,943 Chisum 25,268,450 City View 6,742,329 Clint 2,062,679 Coleman 901,130 Cooper 7,452,426 Coppell 169,129,531 Crowell 736,720 Crowley 14,930,186 Cypress-Fairbanks 438,308,220 Dallas 864,060,327 Deer Park 226,823,150 Denton 140,570,428 Diboll 3,623,530 Dumas 30,189,680 Eagle Mt-Saginaw 259,429,606 Eagle Pass 23,467,260 El Paso 290,736,768 Evadale 18,952,920 Everman 26,776,871 Fabens 18,431,193 Fort Bend 121,672,800 Fort Worth 525,117,963 Frisco 8,325,877 Garland 203,184,733 Garner 4,305,740 Graham 3,557,649 Grand Prairie 106,350,135 Grapevine-Colleyville 807,445,345 Harlingen 43,257,939 Henderson 3,774,110 Hidalgo 9,278,447 Highland Park 79,819,589 Hillsboro 1,896,095 Humble 7,395,940 Huntsville 1,253,449 Iowa Park Consolidated 8,499,254 Judson 62,903,650 Klein 26,373,950 La Porte 278,034,600 La Vega 1,047,180 Lamar Consolidated 1,254,840 Lewisville 244,093,481 Lindale 121,720 Lufkin 27,586,205 Manor 129,132,361 Mansfield 57,721,568 Marble Falls 1,287,662 Marshall 36,802,223 McAllen Consolidated 70,883,060 McGregor 13,223,590 McKinney 229,619,946 Mesquite 66,400,906 Midlothian 68,366,768 Mission Consolidated 22,494,510 Montgomery 5,275,288 Nacogdoches 20,028,050 New Deal 795,532 New Waverly 536,234 North Lamar 35,737,090 Northwest 922,142,113 Palestine 16,675,230 Paris 14,709,000 Pearland 18,768,100 Pflugerville 236,161,940 Plano 203,474,176 Point Isabel 19,734,837 Red Oak 370,250 Richardson 221,689,012 Rockdale 6,462,700 Rockwall 10,670,039 Royse City 2,429,050 San Angelo 20,602,898 San Antonio 89,701,620 San Benito 57,105,495 San Felipe-Del Rio 52,063,610 Schertz-Cibolo-Universal City 40,084,146 Sharyland 183,749,601 Socorro 474,097,332 Spring 33,484,480 Stafford Municipal 132,087,850 Stephenville 44,797,917 Sunnyvale 35,707,527 Terrell 47,389,607 Tyler 132,627,445 Veribest 10,821,979 Waco 26,616,640 Waller 10,923,046 Waxahachie 70,593,663 Weatherford 11,087,036 West Orange-Cove 110,516,170 West Oso 9,140,197 Westwood 3,106,503 Whitehouse 53,644,990 Wichita Falls 47,527,555 Wilmer-Hutchins 22,231,603 Winona 8,567,720 Winters 5,872,920 Wylie 27,640,691 Ysleta 247,475,717 Total (121 ISDs) $10,835,074,466
Annual Property Tax Report
Tax Year 2003
Tax Year 2003