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Chapter 6
Focus on City Taxes

In 2007, 1,047 Texas cities reported taxable value of $1.1 trillion, an increase of $105.9 billion or 11.2 percent from 2006. In 2007, cities levied $5.9 billion in taxes, compared to $5.3 billion in 2006.

The largest city in terms of its tax levy is the city of Houston, with 2007 revenue of $818.3 million (Exhibit 25).

Exhibit 25

Top Ten Cities in Tax Levy, 2007
City Taxable Value Total Tax Rate Reported Tax Levy
City of Houston $133,889,693,102 $0.643750 $818,344,361
City of Dallas $83,923,558,337 $0.747900 $627,664,293
City of San Antonio $66,093,535,395 $0.572300 $378,253,303
City of Fort Worth $37,859,768,467 $0.855000 $323,701,020
City of Austin $69,009,019,416 $0.403400 $278,382,384
City of El Paso $26,277,360,943 $0.671097 $176,346,581
City of Plano $24,503,224,094 $0.473500 $116,022,766
City of Arlington $17,553,533,945 $0.648000 $113,746,900
City of Irving $17,490,448,910 $0.540600 $94,553,367
City of Garland $11,078,433,196 $0.688600 $76,286,091

Source: Texas Comptroller of Public Accounts.

Six of the top 10 highest taxable value cities are in the Dallas-Fort Worth Metroplex. At the other end of the spectrum is the city of Mont Belvieu in Liberty County, with a 2007 tax levy of $162.

Residential homeowners contributed the largest portion of value to cities in 2007, with 54.2 percent of market value (Exhibit 26).

Exhibit 26

Dollar Value of City Properties by Category
Category Amount Percent of Total Value
A. Single-family Residential $632,111,723,103 54.2%
B. Multifamily Residential $70,921,583,987 6.1%
C. Vacant Lots $24,643,589,375 2.1%
D. Rural Real $10,160,159,388 0.9%
F1. Commercial Real $226,632,023,855 19.4%
F2. Industrial Real $22,536,489,403 1.9%
G. Oil, Gas & Minerals $2,909,011,217 0.2%
H. Vehicles $61,384,003 0.0%
J. Utilities $19,969,243,882 1.7%
L1. Commercial Personal $97,998,436,348 8.4%
L2. Industrial Personal $45,011,778,772 3.9%
M. Other Personal $1,894,622,408 0.2%
N. Intangible Personal $0 0.0%
O. Real Property, Inventory $6,453,597,413 0.6%
S. Special Property $4,043,913,546 0.3%
Total Appraised Value $1,165,347,556,700 100%

Source: Texas Comptroller of Public Accounts.

The commercial and industrial sector carried the next largest load, with 33.6 percent of value, including 21.3 percent in real property and 12.3 percent in personal property. Apartment complexes accounted for 6.1 percent of appraised values, while vacant lots and utilities accounted for about 2.1 and 1.7 percent, respectively. Not surprisingly, rural real properties accounted for only 0.9 percent of value in cities.

Taxable value reflects deductions for property not taxable due to homestead exemptions, tax abatements, reinvestment zones and other exemptions. In 2007, 207 cities granted local-option percentage homestead exemptions ranging from 1 percent to 20 percent, the maximum allowed by law. Exhibit 27 shows all deductions to property value granted by Texas cities.

Exhibit 27

Number and Value Lost to Exemptions Granted by Texas Cities
Type of Exemption Number of Cities Granting Exemption Number of Exemptions Granted Value Lost to Exemptions
Local Optional Over-65 Homestead Exemption (Minimum $3,000) 684 822,748 $29,822,168,761
Local Option Percentage Homestead Exemption (Minimum $5,000) 207 1,600,458 $41,078,375,363
Disabled or Deceased Veterans Exemptions 1,027 127,624 $1,189,843,443
10 Percent Cap on Residence Homesteads 1,019 Not Reported $15,181,137,072
Freeport Exemptions 157 4,735 $16,330,723,449
Pollution Control 230 1,403 $1,716,472,107
Water Conservation Initiatives 0 0 $0
Solar and Wind Powered Exemptions 281 Not Reported $153,582,475
Historical Exemptions 88 Not Reported $617,349,894
Property Redevelopment Tax Abatement 175 1,934 $7,834,609,944

Source: Texas Comptroller of Public Accounts.

The total value lost to exemptions granted by cities was $113.9 billion in 2007.

The Texas Constitution, Article XI Sections 4 and 5, limit the rate at which a city can levy a property tax. The Constitution caps the tax rate for cities of 5,000 or less at $1.50 per $100 of valuation. Larger cities, with populations of more than 5,000, may levy up to $2.50 per $100 of valuation. A home-rule city may limit this rate to less than $2.50 per $100 of value in its charter. Type B general-law cities may only levy a property tax of up to 25 cents per $100 assessed valuation.

The average property tax rate in Texas cities in 2007 was $0.48506, down slightly from $0.4865 in 2006. Seventeen Texas cities had tax rates of more than $1 per $100 of valuation. The city of Anson in Jones County had the highest rate at $1.3633. Four other cities also only assessed taxes for retiring debt. The city of Lone Star in Morris County assessed the lowest tax rate, at $0.005273 per $100 of value. More than half of the cities (553) had tax rates of less than $0.50 per $100 of value.

Full details of county property values are available on the Comptroller’s Web site at www.window.state.tx.us/cityvalues/proptax/annrpt07 (Excel, 160 KB). The data lists cities according to the appraisal districts in which they are located, and lists the appraisal districts in alphabetical order. Some cities appear more than once because more than one appraisal district may appraise property for them.

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