Chapter 7
Focus on City Taxes
In 2008, 1,054 Texas cities levied a property tax that generated $6.5 billion in taxes. Appraisal districts reported $1.1 trillion of taxable value in these cities, an increase of $94.5 billion, or 9 percent, from 2007.
The largest city in terms of its tax levy is the city of Houston, with 2008 revenue of $957.1 million (Exhibit 36).
Exhibit 36
Top 10 Cities in Tax Levy, 2008
| City | Taxable Value | Total Tax Rate | Reported Tax Levy |
|---|---|---|---|
| Houston | $149,840,247,403 | $0.638750 | $957,104,580 |
| Dallas | $85,588,834,496 | $0.747900 | $640,118,894 |
| San Antonio | $73,053,410,760 | $0.567140 | $414,315,114 |
| Fort Worth | $40,803,559,163 | $0.855000 | $348,870,430 |
| Austin | $73,834,596,483 | $0.401200 | $296,224,402 |
| El Paso | $28,835,127,305 | $0.633000 | $182,526,356 |
| Arlington | $18,503,682,300 | $0.648000 | $119,903,861 |
| Plano | $24,962,237,182 | $0.473500 | $118,196,193 |
| Irving | $18,559,970,819 | $0.540600 | $100,335,203 |
| Garland | $11,223,434,499 | $0.699600 | $78,519,148 |
Source: Texas Comptroller of Public Accounts.
Six of the top 10 highest taxable value cities are in the Dallas-Fort Worth Metroplex. They are the same as in 2007, except that Arlington and Plano traded places. At the other end of the spectrum is the city of Quintana in Brazoria County, with a 2008 tax levy of $1,485.
Residential homeowners, including mobile home owners, contributed the largest portion of value to cities in 2008, with 53.7 percent of market value. This share of the total value, however, dropped from 54.4 percent in 2007 (Exhibit 37).
Exhibit 37
Dollar Value of City Properties by Category, 2007-08
Residential
| Property Category |
2007 City Tax Values |
Percent of Total |
2008 City Tax Values |
Percent of Total |
Percent Change from 2007 to 2008 |
|---|---|---|---|---|---|
| Single-family Residential | $632,111,723,103 | 54.2% | $679,226,591,425 | 53.6% | 7.5% |
| Mobile Homes | $1,894,622,408 | 0.2% | $1,885,227,651 | 0.1% | -0.5% |
| Total Residential | $634,006,345,511 | 54.4% | $681,111,819,076 | 53.7% | 7.4% |
Acreage/Lots
| Property Category |
2007 City Tax Values |
Percent of Total |
2008 City Tax Values |
Percent of Total |
Percent Change from 2007 to 2008 |
|---|---|---|---|---|---|
| Vacant Lots | $24,643,589,375 | 2.1% | $27,935,439,584 | 2.2% | 13.4% |
| Rural Land and Improvements | $10,160,159,388 | 0.9% | $10,742,969,661 | 0.8% | 5.7% |
| Total Acreage Lots | $34,803,748,763 | 3.0% | $38,678,409,245 | 3.1% | 11.1% |
Business Properties
| Property Category |
2007 City Tax Values |
Percent of Total |
2008 City Tax Values |
Percent of Total |
Percent Change from 2007 to 2008 |
|---|---|---|---|---|---|
| Commercial Real Estate | $226,632,023,855 | 19.4% | $254,898,934,952 | 20.1% | 12.5% |
| Commercial Personal | $97,998,436,348 | 8.4% | $104,960,833,676 | 8.3% | 7.1% |
| Multi-family Residential | $70,921,583,987 | 6.1% | $78,338,182,763 | 6.2% | 10.5% |
| Industrial Real Estate | $22,536,489,403 | 1.9% | $25,016,283,794 | 2.0% | 11.0% |
| Industrial Personal | $45,011,778,772 | 3.9% | $49,718,621,493 | 3.9% | 10.5% |
| Oil and Gas | $2,909,011,217 | 0.2% | $3,704,495,913 | 0.3% | 27.3% |
| Utilities | $19,969,243,882 | 1.7% | $20,055,222,984 | 1.6% | 0.4% |
| Vehicles | $61,384,003 | 0.0% | $51,747,817 | 0.0% | -15.7% |
| Special Inventory | $4,043,913,546 | 0.3% | $4,117,817,020 | 0.3% | 1.8% |
| Residential Inventory | $6,453,597,413 | 0.6% | $6,555,944,698 | 0.5% | 1.6% |
| Intangible Personal | $0 | 0.0% | $2,697,442 | 0.0% | - |
| Total Business Properties | $496,537,462,426 | 42.6% | $547,420,782,552 | 43.2% | 10.2% |
| Total All Properties | $1,165,347,556,700 | 100% | $1,267,211,010,873 | 100% | 8.7% |
Source: Texas Comptroller of Public Accounts.
The commercial sector grew 10.2 percent, compared with the residential growth of 7.4 percent. Commercial properties represent 43.2 percent of value, up from 42.6 percent in 2007. Commercial and industrial real property represented 20.1 and 2 percent, respectively; commercial and industrial personal property represented 8.3 and 3.9 percent, respectively; apartments represented 6.2 percent; oil and gas properties represented 0.3 percent; utilities represented 1.6 percent; and inventories represented 0.8 percent.
Taxable value reflects deductions for property not taxable due to homestead exemptions, tax abatements, reinvestment zones and other exemptions. In 2008, 213 cities granted local-option percentage homestead exemptions ranging from 1 percent to 20 percent, the maximum allowed by law. Exhibit 38 shows all deductions to property value granted by Texas cities.
Exhibit 38
Number and Value Lost to Exemptions Granted by Texas Cities, 2008
| Type of Exemption | Number of Cities Granting Exemptions | Number of Exemptions Granted | Value Lost to Exemptions |
|---|---|---|---|
| Local Optional Over-65 Homestead Exemption (Minimum $3,000) | 685 | 844,058 | $31,931,346,045 |
| Local Option Percentage Homestead Exemption (Minimum $5,000) | 213 | 1,658,429 | $44,235,525,355 |
| Disabled or Deceased Veterans Exemptions | 1,028 | 130,804 | $1,226,408,404 |
| 10 Percent Cap on Residence Homesteads | 1,032 | Not Reported | $16,094,786,784 |
| Freeport Exemptions | 160 | 5,066 | $18,152,157,076 |
| Pollution Control | 249 | 1,450 | $1,879,396,712 |
| Water Conservation Initiatives | 0 | 0 | $0 |
| Solar and Wind Powered Exemptions | 314 | Not Reported | $250,750,982 |
| Historical Exemptions | 86 | Not Reported | $870,281,880 |
| Property Redevelopment Tax Abatement | 186 | 2,134 | $7,550,027,368 |
| Total | - | - | $122,190,680,606 |
Source: Texas Comptroller of Public Accounts.
In 2008, the total value lost to exemptions granted by cities was nearly $122.2 billion.
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 fewer 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 2008 was $0.492329, up from $0.48506 in 2007. Twenty Texas cities, three more than in 2007, had tax rates of more than $1 per $100 of valuation. The city of Anson in Jones County had the highest rate, at $1.3375. Seven cities only assessed taxes for retiring debt. The Village of Bee Cave in Travis County assessed the lowest tax rate, at $0.020000 per $100 of value. More than half of the cities (624) had tax rates of less than 50 cents per $100 of value.
Full details of city property values are available on the Comptroller's Web site at www.window.state.tx.us/taxinfo/proptax/annual08/2008_city_values.xls. The data lists cities according to the CADs in which they are located and lists the CADs in alphabetical order. Some cities appear more than once because more than one appraisal district may appraise property for them.