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Chapter 1
Focus on Taxes Statewide

In tax year 2005, 3,702 local taxing units levied almost $33.5 billion in property taxes, 8.1 percent more than in 2004.

The Texas Constitution authorizes local governments to levy property taxes. Local governments include counties, school districts, cities and special purpose districts such as junior colleges, hospitals, utilities, flood control, emergency service districts and others.

Each of the state’s 254 counties has a single appraisal district that determines the appraised value of taxable property, with the exception of Randall and Potter counties that together form one district. Appraised value is the chief appraiser’s estimate of the full market or productivity value of a property usually as of January 1. Local governments, commonly called taxing units, levy property taxes based on the property values set by the county appraisal districts. Local governments, however, set the tax rate based on their budget needs.

Table 1 shows taxing units for 2004 and 2005. It lists the number of units, the tax levy and the percent of levy per type of taxing units for each year. It also compares the percent change between 2004 and 2005 for each type of taxing unit. In 2005, property taxes increased from 6.4 to 9.0 percent by taxing unit from 2004. School property taxes—imposed by 1,029 independent school districts and representing about 60.3 percent of total property taxes—totaled about $20.2 billion in 2005. City property taxes increased to exceed $4.9 billion from 2004 to 2005. County property taxes exceeded $4.7 billion in 2005. The levy of special purpose districts rose by 7.1 percent to more than $3.6 billion from 2004 to 2005. The tax levy is the total amount of taxes imposed by a taxing unit on taxable property within its boundaries.

Table 1: Property Taxes Reported by Unit Type - 2004 and 2005

Unit Type Number of Units for 2004 Tax Year Tax Levy for 2004 Tax Year Percent Tax Levy for 2004 Tax Year Number of Units for 2005 Tax Year Tax Levy for 2005 Tax Year Percent Tax Levy for 2005 Tax Year Percent Change from 2004 Tax Year to 2005 Tax Year
School Districts 1,031 $18,533,964,802 59.8% 1,029 $20,194,915,813 60.3% 9.0%
Cities 1,034 $4,607,757,531 14.9% 1,043 $4,901,791,597 14.6% 6.4%
Counties 254 $4,462,844,074 14.4% 254 $4,772,652,208 14.3% 6.9%
Special Purpose Districts 1,429 $3,369,068,834 10.9% 1,376 $3,609,629,697 10.8% 7.1%
Total 3,748 $30,973,635,241 100.0% 3,702 $33,478,989,315 100.0% 8.1%

Totals may not add due to rounding.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Property Tax Growth

Table 2 shows the growth in property tax levies by the four major types of taxing units since 1985. Comparing tax years 1985 and 2005, the total of all taxing units' property taxes grew 273.7 percent.

Table 2: Growth of the Property Tax by Unit Type, 1985 through 2005

Tax Year Special Purpose District Levy County Levy City Levy School Levy Total Levy
1985 $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
2004 $3,369,068,834 $4,462,844,074 $4,607,757,531 $18,533,964,802 $30,973,635,241
2005 $3,609,629,697 $4,772,652,082 $4,901,791,597 $20,194,915,813 $33,478,989,315

Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Property Taxes Compared to Other Taxes

When 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. Table 3 shows the amount of property taxes expended compared to other taxes, such as the state sales tax, local sales tax and other state taxes. The amount shown in Table 3 and Figure A for property taxes are from the 2004 property tax levy that local governments spent in Fiscal 2005. This figure is used in order to match the other state taxes collected and spent in Fiscal 2005, ending on August 31, 2005.

Table 3: Property Taxes in Relation to other Taxes

Type of Tax Amount Expended Percent of Total
Tax Expenditures
Property Tax $30,973,635,241 47.4%
State Sales Tax $16,312,811,054 25.0%
Local Sales Tax $4,473,758,886 6.9%
Other State Taxes $13,525,466,560 20.7%
Total Taxes $65,285,671,741 100.0%

Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division and Comptroller's 2005 Annual Cash report.

Figure A graphically shows the expenditures of the various taxes listed in Table 3. The property tax represents the largest amount with $31 trillion, or 47.4 percent of the major four tax sources. Next comes the state sales tax at $16.3 trillion, or 25 percent; other state taxes at $13.5 trillion, or 20.7 percent; and the local sales tax at $4.5 trillion, or 6.9 percent.


Major state and local sales taxes and property taxes in 2005 totaled almost $65.3 billion. Property taxes remained the single largest type of tax at almost 47.4 percent of this total.

State sales taxes, the next largest revenue source at $16.3 billion, represented 25.0 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, mixed beverage and cigarette taxes and all other taxes, the state’s share of the total tax levy is about 45.7 percent. Local city and county sales taxes, along with metropolitan transit authority taxes, were 6.9 percent of the total.

Tax Rate Rollback Activity

While the Comptroller is not required to track rollback elections, the office assembles this data from information provided by county appraisal districts.

Local voters may limit adopted tax rates, if local taxing units adopt tax rates above their rollback tax rates. A rollback tax rate is the rate a taxing unit, excluding school districts, may not exceed without allowing its voters to petition for a reduced rate. A school district exceeding this rate must hold an election automatically, without the need of a petition process, to allow voters to roll back taxes.

Local voters in two of 17 school districts limited their 2005 adopted tax rate. Voters in the other 15 independent school districts ratified 2005 tax rates that exceeded rollback rates. The two school districts are Aspermont Independent School District and Phillips-Stinnett-Plemons Consolidated Independent School District. In 2004, four taxing units had to limit their tax rates after 25 elections were held to roll back their tax rates.

Except for school districts, 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 8 percent increase for those operations plus sufficient funds to pay debts in the coming year. For school districts, in 2005 the extra increase is $0.06 per $100 of property value, rather than 8 percent, based on different calculation steps. House Bill 1 enacted in 2006 by the Third Called Session or the 79th Legislature revised the requirements for school district rollback elections, beginning in tax year 2006.

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. A school district that adopts a tax rate above the rollback rate must hold a rollback election between 30 and 90 days after its board of trustees adopts the rate. No petition by citizens is required. The school district’s election differs from other types of units in that the school district asks voters to ratify the district’s adopted tax rate. If a simple majority of the votes cast in the election favors 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.

Table 4 shows the taxing units that held roll back elections, with the election date, election results, the adopted tax rate, the rollback tax rate and the percent the adopted tax rate exceeded the district’s rollback rate. Tax rates are per $100 of value.

Table 4: 2005 School Districts Rollback Election Results

Taxing Unit and Election Date County Election Results 2005 Tax Rate Rollback Rate Percent Increase
Andrews ISD Andrews Ratified
For - 944
Against - 527
1.65224 1.5633 6%
Aspermont ISD Stonewall Against ratification
Against - 170
For - 102
1.4398
old rate 1.50
1.4398 4%
Cuero ISD Dewitt Ratified
For - 508
Against - 458
1.46 1.27 15%
Carlisle ISD Rusk Ratified
For - 17
Against - 8
1.5492 1.42 9%
Dawson ISD Dawson Ratified
For - 32
Against - 8
1.5359 1.4245 8%
Grandfalls-Royalty ISD Ward Ratified
For - 56
Against - 25
1.5668 1.3352 17%
Guthrie CISD King Ratified
For - 92
Against - 22
1.41 1.1342 24%
La Poynor ISD Henderson Ratified
For - 247
Against - 145
1.56 1.411 11%
Meadow ISD Terry Ratified
For - 73
Against - 21
1.5625 1.25 25%
Phillips-Stinnett-Plemons CISD Hutchinson Against ratification
Against - 273
For - 203
1.50614
old rate 1.604
1.50614 6%
Rankin ISD Upton Ratified
For - 95
Against - 74
1.55 1.2987 19%
Sands ISD Dawson Ratified
For - 47
Against - 7
1.50 1.355 11%
Smyer ISD Hockley Ratified
For - 115
Against - 53
1.50 1.3044 15%
Sundown ISD Hockley Ratified
For - 174
Against - 56
1.50 1.1984 25%
Trinidad ISD Henderson Ratified
For - 79
Against - 56
1.6146 1.443 12%
Whiteface CISD Cochran Ratified
For - 93
Against - 91
1.50 1.27 18%
Whitharral ISD Hockley Ratified
For - 67
Against - 8
1.50 1.2489 20%

Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.


County voters are more likely to roll back taxes via an election. Since 1982, 83.3 percent of county rollback elections received voter approval (Table 5). By contrast, only slightly more than a quarter of school district rollback elections result in rejecting a school board’s adopted tax rate. Overall, voters approve nearly half of tax rollback elections.

Table 5: History of Rollback Elections That Passed, 1982 – 2005

Tax Year School Dis-tricts 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
2004 2 of 23 0 1 of 1 1 of 1 4 of 25
2005 2 of 17 0 0 0 2 of 17
Total 57 of 207 35 of 42 48 of 75 17 of 29 157 of 336
Percentage 27.5% 83.3% 64.0% 58.6% 46.7%

Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.


Over the last 23 years, the number of rollback elections called by voters has spiked four times, in 1982, 1990, 2001 and 2004. This is illustrated in Figure B, which lists the information from the Total column in Table 5 above. Voter approval of these elections, however, has shown a steady decline over the years.


Freeport Exemption

In 1990, school districts, counties, cities and junior college districts gained the right to choose whether to tax freeport property. Property Tax Code Section 11.251, enacted by the 1989 Texas Legislature, defines freeport property as goods held in Texas temporarily for up to 175 days for assembling, processing, manufacturing, storage or other purposes.

Texas patterned its law 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 enacted Tax Code Section 11.251 entitled “Tangible Personal Property Exempt”, which taxpayers and local tax officials refer to as the freeport exemption. Personal property can include privately owned automobiles, motorcycles and light trucks not used to produce income; fixtures, equipment and inventory used by a commercial or industrial business to produce income; and mobile homes on land owned by someone else. Personal property may also include privately owned aircraft, boats, travel trailers, motor homes and mobile homes on rented or leased land.

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 20 taxing units to 342 units in tax year 2005. The amount of value exempted for these taxing units increased by $4.5 billion, or 12.4 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 identifies the total exempted value by counties, cities and school districts for the freeport exemption for 2004 and 2005. Table 7 lists the freeport taxable value loss by county, Table 8 lists the freeport loss by city and Table 9 lists the freeport value loss by school district. Table 9 also includes the South Texas ISD, which is not part of the PVS.

TABLE 6: Taxing Units that Exempt Freeport property

Types of Taxing Units That
Exempt Freeport Property
2004 Number of Units 2004 Taxable Value Loss 2005 Number of Units 2005 Taxable Value Loss
County 52 $11.6 billion 53 $13.6 billion
City 139 $11.6 billion 143 $13.5 billion
School District 131 $13.2 bil-lion 144 $15.4 billion
Total 322 $36.4 billion 340 $42.5 billion

Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Table 7: 2005 Freeport Value Loss by County

County Freeport Value Loss
Anderson County $18,514,348
Angelina County 39,801,024
Archer County 692,920
Bastrop County 6,322,490
Bexar County 344,624,360
Bosque County 2,946,772
Brazos County 24,799,439
Burnet County 6,612,899
Camp County 3,250,560
Coleman County 340,350
Collin County 639,820,440
Comal County 6,663,027
Dallas County 3,173,436,032
Delta County 366,694
Denton County 1,040,351,934
Eastland County 6,656,470
Ector County 66,134,900
El Paso County 1,159,102,128
Foard County 419,380
Gray County 14,587,875
Grayson County 109,913,743
Guadalupe County 143,411,063
Harrison County 93,031,722
Hidalgo County 318,882,715
Hill County 2,150,027
Hutchinson County 16,827,270
Kaufman County 71,269,931
Kendall County 13,073,941
Lamar County 76,337,000
Lubbock County 3,129,500
Maverick County 80,781,990
McLennan County 18,988,074
Milam County 133,969,409
Montgomery County 26,554,560
Palo Pinto County 119,226,799
Parker County 13,831,290
Potter County 177,267,406
Randall County 72,884,257
Rockwall County 18,883,658
Runnels County 11,489,450
Rusk County 4,368,390
Smith County 232,161,753
Tarrant County 3,408,147,364
Titus Country 9,633,890
Tom Green County 33,808,136
Travis County 1,440,360,577
Val Verde County 34,852,776
Walker County 15,058,077
Webb County 161,114,939
Wharton County 9,755,950
Wichita County 107,796,763
Wise County 18,855,673
Young County 6,063,820
Total (53 Counties) $13,559,325,955

Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Tables 8 and 9 below are in PDF format. If you do not already have it, you will need to download Adobe Acrobat Reader to view and print the PDF files.

PDF file Table 8: 2005 Freeport Value Loss by City (PDF, 202 KB)

PDF file Table 9: 2005 Freeport Value Loss by School District (ISD) (PDF, 216 KB)

During the period from 1995 to 2005, the number of taxing entities granting freeport exemptions has grown from 162 to 340, or 109.9 percent (Table10). During the same span, the value loss in taxes to these taxing entities grew from $11.0 billion to $42.5 billion, or 286.4 percent.

Table 10: Taxing Units that Exempt Freeport Property, 1995 through 2005 (in Millions)

Counties

Year Number of Counties Total Value Loss
in Billions
1995 32 $4.1
1996 34 $4.9
1997 35 $5.5
1998 40 $5.9
1999 40 $6.4
2000 42 $9.3
2001 46 $11.7
2002 46 $10.3
2003 49 $10.1
2004 52 $11.6
2005 53 $13.6

Cities

Year Number of Cities Total Value Loss
in Billions
1995 69 $4.0
1996 69 $4.3
1997 70 $4.7
1998 86 $5.4
1999 94 $6.7
2000 101 $8.6
2001 109 $10.8
2002 115 $9.6
2003 127 $9.7
2004 139 $11.6
2005 143 $13.5

School Districts

Year Number of School District Total Value Loss
in Billions
1995 61 $2.9
1996 70 $3.6
1997 69 $4.2
1998 75 $4.6
1999 85 $5.9
2000 95 $7.2
2001 106 $10.6
2002 113 $10.0
2003 121 $10.8
2004 131 $13.2
2005 144 $15.4

Total for all taxing units

Year Total All Entities Total Value Loss,
All Entities
1995 162 $11.0
1996 173 $12.8
1997 174 $14.4
1998 201 $15.9
1999 219 $19.0
2000 238 $25.1
2001 261 $33.1
2002 274 $29.9
2003 297 $30.6
2004 322 $36.4
2005 340 $42.5

Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

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