Chapter 1
Focus on Statewide Taxes
In tax year 2006, Texas' 3,758 local taxing units levied $35.5 billion in property taxes, 6.2 percent more than in 2005.
The Texas Constitution authorizes local governments to levy property taxes. Local governments include counties, school districts, cities and special-purpose districts such as junior college, hospital, utilities, flood control and emergency service districts, among 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 Potter and Randall counties, which form a single district. Appraised value is the county appraisal district's estimate of the full market or productivity value of a property, usually as of Jan 1. Local governments, commonly called taxing units, levy property taxes based on the property values set by the CADs. Local governments set the tax rate based on their budgetary needs.
Table 1 shows taxing units for 2005 and 2006. It lists the number of units, the tax levy and the percent of levy per type of taxing unit for both years. It also compares the percentage change between 2005 and 2006 for each type of taxing unit. School property taxes–imposed by 1,027 independent school districts and representing about 58.8 percent of total property taxes–totaled about $20.9 billion in 2006. In that year, city property taxes increased to more than $5.3 billion, as did county property taxes. The levy of special purpose districts rose by 10.04 percent from 2005 to 2006, to more than $3.9 billion.
TABLE 1: Property Taxes Reported by Unit Type - 2005 and 2006
| Unit Type |
2005 Number of Units |
2005 Tax Levy |
2005 Percent of Levy |
2006 Number of Units |
2006 Tax Levy |
2006 Percent of Levy |
Percent Change from 2005 to 2006 |
|---|---|---|---|---|---|---|---|
| School Districts | 1,029 | $ 20,194,915,813 | 60.3% | 1,027 | $ 20,918,122,059 | 58.8% | 3.6% |
| Cities | 1,043 | $ 4,901,791,597 | 14.6% | 1,044 | $ 5,322,985,519 | 15.0% | 8.6% |
| Counties | 254 | $ 4,772,652,208 | 14.3% | 254 | $ 5,339,613,542 | 15.0% | 11.9% |
| Special Districts | 1,376 | $ 3,609,629,697 | 10.8% | 1,433 | $ 3,972,185,910 | 11.2% | 10.04% |
| Total | 3,702 | $ 33,478,989,315 | 100.0% | 3,758 | $ 35,552,907,030 | 100.0% | 6.2% |
Totals may not add due to rounding.
Source: Texas Comptroller of Public Accounts, Property Tax Assistance Division.
Property Tax Growth
Table 2 shows the growth in property taxes levied by the four major types of taxing units since tax year 1986. Comparing tax years 1986 to 2006, these taxing units' combined levies rose by 269.7 percent, or an average of about 13.5 percent per year.
TABLE 2: Growth of the Property Tax by Unit Type - 1986 through 2006
| Tax Year | Special Purpose District Levy |
County Levy | City Levy | School Levy | Total Levy |
|---|---|---|---|---|---|
| 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 | $4,772,652,208 | $4,901,791,597 | $20,194,915,813 | $33,478,989,315 |
| 2006 | $3,972,185,910 | $5,339,613,542 | $5,322,985,519 | $20,918,122,059 | $35,552,907,030 |
Source: Texas Comptroller of Public Accounts, Property Tax Assistance Division.
Property Taxes Compared to Other Taxes
When examining the role of property taxes in state and local taxation, it is important to remember various taxes have different collection cycles. Table 3 and Figure A show the amount of 2005 property taxes levied compared to 2006 state sales tax, local sales tax and other state taxes. These figures represent tax expenditures for fiscal 2006, which ended on Aug. 31, 2006.
TABLE 3: Property Taxes in Relation to Other Taxes
| Type of Tax | Tax Amount | Percent of Total Tax |
|---|---|---|
| Property Tax | $ 33,478,989,315 | 46.4% |
| State Sales Tax | $ 18,275,209,754 | 25.3% |
| Local Sales Taxes | $ 5,124,731,898 | 7.1% |
| Other State Taxes | $ 15,269,287,793 | 21.2% |
| Total Taxes | $ 72,148,218,760 | 100.0% |
Source: Texas Comptroller of Public Accounts, Property Tax Assistance Division and 2006 Annual Cash Report.
Figure A graphically illustrates amounts and percentages of the taxes listed in Table 3. State and local sales taxes, other state taxes and property taxes exceeded $72.1 billion in 2006. Property tax represented the largest tax source, at almost $33.5 billion or 46.4 percent of the major four tax sources.
State sales taxes, the next largest revenue source at $18.2 billion, represented 25.3 percent of the total. Other state taxes totaled $15.2 billion, or 21.2 percent, followed by local sales tax revenue at $5.1 billion, or 7.1 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 state and local tax levy is about 46.5 percent.
Tax Rate Rollback Activity
While the Comptroller is not required to track rollback elections, the agency assembles this data from information provided by CADs.
Local voters may limit adopted tax rates if local taxing units adopt rates above their rollback tax rates. A rollback tax rateis the rate a taxing unit other than a school district 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 its voters to roll back the tax rate.
Local voters in only one of the 15 school districts that exceeded the rollback rate succeeded in limiting their 2006 adopted tax rate. That school district was Montague Independent School District. Voters in the other 14 school districts ratified 2006 tax rates that exceeded their rollback rates. In 2005, 17 school districts exceeded the rollback rate; two districts had to limit their tax rates after an election.
Except for school districts, the rollback rate provides the taxing unit with about the same amount of tax revenue it spent in the previous year for day-to-day operations, plus an 8 percent increase for those operations, as well as sufficient funds to pay debts in the coming year. In 2006, for their rollback rate calculation, school districts multiplied the adopted 2005 operating tax rate by 88.67 percent plus a 4-cent increase for operations plus the necessary rate to pay for the coming year's debt requirements.
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. Again, no petition by citizens is required. The school district's election differs from other taxing 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, it 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 rollback elections in 2006; the county in which each taxing unit is located; the election results; the adopted tax rate; the rollback tax rate; and the percent by which the adopted tax rate exceeded the rollback rate. Tax rates are per $100 of value.
TABLE 4: 2006 Rollback Election Results
School District
| Taxing Unit | County | Election Results | 2006 Tax Rate | Rollback Rate | Percent Increase |
|---|---|---|---|---|---|
| Bells ISD | Grayson |
Ratified For - 265; Against - 136 |
1.56 | 1.43 | 9% |
| Bloomburg ISD | Cass |
Ratified For - 70;Against - 25 |
1.50 | 1.37 | 9% |
| Carrizo Springs CISD | Dimmit |
Ratified For - 521; Against - 78 |
1.569 | 1.439 | 9% |
| Cotulla ISD | LaSalle |
Ratified For - 256; Against - 96 |
1.555 | 1.425 | 9% |
| Crystal City ISD | Zavala |
Ratified For - 401; Against - 51 |
1.79 | 1.66 | 8% |
| Cuero ISD | Dewitt |
Ratified For - 142; Against - 124 |
1.47 | 1.37 | 7% |
| Dilley ISD | Frio |
Ratified For - 128; Against - 18 |
1.579 | 1.449 | 9% |
| Highland ISD | Nolan |
Ratified For - 50; Against - 13 |
1.5213 | 1.309 | 16% |
| Itasca ISD | Hill |
Ratified For - 153; Against - 69 |
1.5894 | 1.4594 | 9% |
| Montague ISD | Montague |
Against Ratification; Against - 11; For - 9 |
1.1927 Old Rate 1.26 |
1.1927 | 6% |
| Navarro ISD | Guadalupe |
Ratified For - 576;Against - 338 |
1.82 | 1.69 | 8% |
| Nordheim ISD | Dewitt |
Ratified For - 41; Against - 24 |
1.70 | 1.34 | 27% |
| Pearsall ISD | Frio |
Ratified For - 494; Against - 134 |
1.57 | 1.44 | 9% |
| Texarkana ISD | Bowie |
Ratified For - 652; Against - 106 |
1.57 | 1.57 | 0% |
| Whitewright ISD | Grayson |
Ratified For - 206; Against - 79 |
1.70 | 1.57 | 8% |
Special District
| Taxing Unit | County | Election Results | 2006 Tax Rate | Rollback Rate | Percent Increase |
|---|---|---|---|---|---|
| Blinn JuniorCollege | Washington |
Passed For - 1,654; Against - 1,317 |
.0513 Old Rate .082 |
.0513 | 60% |
City
| Taxing Unit | County | Election Results | 2006 Tax Rate | Rollback Rate | Percent Increase |
|---|---|---|---|---|---|
| Sunset | Montague |
Passed For - 75; Against - 50 |
.1872 Old Rate .2534 |
.1872 | 35% |
| Texas City | Galveston |
Failed Against - 1,656; For - 1,241 |
.4562 | .4239 | 7% |
Source: Texas Comptroller of Public Accounts, Property Tax Assistance Division.
County voters are more likely to roll back the tax rate via an election. Since 1982, 83.3 percent of county rollback elections have received voter approval (Table 5). By contrast, only slightly more than a quarter of school district rollback elections rejected a school board's adopted tax rate. In all, Texas voters have approved about 43 percent of tax rollback elections since 1982.
TABLE 5: History of Successful Rollback Elections, 1982 - 2006
| 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 |
| 2004 | 2 of 23 | 0 | 1 of 1 | 1 of 1 | 4 of 25 |
| 2005 | 2 of 17 | 0 | 0 | 0 | 2 of 17 |
| 2006 | 1 of 15 | 0 | 1 of 2 | 1 of 1 | 3 of 18 |
| Total | 58 of 222 | 35 of 42 | 49 of 77 | 18 of 30 | 160 of 371 |
| Percentage | 26.1% | 83.3% | 63.6% | 60% | 43.1% |
Source: Texas Comptroller of Public Accounts, Property Tax Assistance Division.
Over the last 24 years, the number of rollback elections called by voters has spiked four times, in 1982, 1990, 2001 and 2004 (Figure B). Voter approval of these elections, however, has declined steadily over the years.
