Texas Comptroller of Public Accounts

Texas Comptroller of Public Accounts, Glenn Hegar

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Section Three: School District Findings

To calculate taxable values, the Comptroller first employed the methods described earlier to estimate a value for each property category. Totaling the category estimates produced the estimated gross value. To reduce the estimated gross value to taxable value, Government Code Section 403.302 requires the Comptroller to subtract:

  • total value exempted by state-mandated homestead exemptions;
  • value exempted by state-mandated disabled veterans’ exemptions;
  • adjusted value losses arising from the limitations on taxes of residence homesteads owned by person age 65 or older (or the surviving spouse age 55 or older);
  • value lost because of tax abatements granted by May 31, 1993, and tax increment financing zones approved before September 1, 1999;
  • value lost to freeport exemptions;
  • value lost for productivity appraisal;
  • value for taxes deferred by homeowners age 65 or older or for homeowners with appreciating homestead values;
  • value lost for the residence homestead appraisal limitation;
  • value lost to the value limitation under Chapter 313, Tax Code; and
  • other allowable exemptions.

Appraisal and school districts reported total losses arising from each of these exemptions and exclusions. The school district summary shows statewide value totals by category and total deductions for homestead and veterans’ exemptions, the residence homestead limitation, the over-65 tax limitation and value lost to tax abatements and other exemptions.

The state summaries show several figures related to rural real property (Category D). These numbers, which reflect the agricultural and timber appraisal laws, show the following:

  • market value of acreage that did not qualify for productivity (agricultural or timber) appraisal and farm and ranch improvements;
  • productivity value of qualified agricultural acreage; and
  • total taxable value of all acreage (the sum of Items 1 and 2).

The state total for “Category D, Rural Real (Taxable)” equals the sum of the productivity value of qualified agricultural and timber land and the market value of other rural real property. The value lost to limitations for homeowners age 65 or older (or their surviving spouse age 55 or older) arises from a state law that limits the school taxes that 65 or older homeowners pay on their residence homesteads. The school taxes cannot increase over the amount the owner paid in the first year that the owner was 65 years old and applied for the exemption on that homestead. As a result, school districts may not levy a tax on the full market value of such properties. These homeowners may also defer paying the taxes on their homesteads until they no longer own or occupy that homestead.

Section 403.302, Government Code requires certification of two values—one with only a $5,000 general homestead exemption (T1) and one with the required $15,000 general homestead exemption (T2). The Texas Education Agency uses the T1 value to ensure full reimbursement for school districts that would not otherwise be fully held harmless for the increased losses caused by the additional exemption amount. These school districts receive Tier I state funding only or are budget balanced districts, including Education Code Chapter 41 school districts. The T1 value will not affect funding for other districts.

Section 403.302, Government Code also requires the Comptroller to certify an adjustment for both T1 and T2 for one-half the optional percentage homestead exemption that some school districts grant. These are noted as T3 and T4. The Commissioner of Education may provide for additional funding to these school districts with the optional exemption if (1) funds are specifically appropriated and (2) the appropriated state funds for the Foundation School Program for the school year exceed the state funds distributed to school districts. School districts reported to the Comptroller the value lost for the optional percentage homestead exemption.

2005 Final Property Value Study
School District Summary Worksheet: State Totals

Property Category 2004 Value Finding to TEA 2005 Local Tax Roll Value 2005 Value Finding to TEA
A. Single-Family Residences $ 638,130,202,053 $ 688,166,719,005 $ 688,166,719,005
B. Multi-Family Residences 56,617,826,502 61,592,594,311 61,592,594,311
C. Vacant Lots 28,342,513,546 30,490,273,996 30,490,273,996
D. Rural Acreage 56,084,581,859 59,195,768,872 59,195,768,872
F1. Commercial Real 178,585,685,567 193,511,586,389 193,511,586,389
F2. Industrial Real 67,101,847,596 68,363,613,951 68,363,613,951
G. Oil, Gas, Minerals 51,889,539,655 67,412,630,466 67,412,630,466
J. Utilities 39,770,834,488 39,941,946,875 39,941,946,875
L1. Commercial Personal 92,219,493,328 95,932,476,597 95,932,476,597
L2. Industrial Personal 58,737,434,141 64,903,211,948 64,903,211,948
M. Mobile Homes & Other Personal 5,427,726,549 5,559,280,374 5,559,280,374
N. Intangible Personal & Uncertified 464,931,396 11,095,432 11,095,432
O. Residential Inventory 5,336,923,903 6,184,563,645 6,184,563,645
S. Special Inventory 3,389,001,170 3,969,091,569 3,969,091,569
Subtotals: $1,282,098,541,753 $1,385,234,853,430 $1,385,234,853,430
    Less Total Exemptions: 158,465,746,162 168,070,638,331 168,070,638,331
Total Taxable Value: $1,123,632,795,591 $1,217,164,215,099 $1,217,164,215,099

Deductions: Section 403.302, Texas Government Code

  2005 Local Tax Roll 2005 Value Finding to TEA
Homestead & Disabled Vets $ 82,242,669,941 $ 82,242,669,941
Cap Value Loss 9,727,460,783 9,727,460,783
Over 65 Freeze Loss 46,404,878,173 46,404,878,173
All Other 29,695,629,434 29,695,629,434
Total Deductions $168,070,638,331 $168,070,638,331

Statewide Category D Recap

  2005 Local Tax Roll 2005 Value Finding to TEA
Market Value of Non-Qualified Acres and Farm and Ranch Improvements$ 47,632,022,687 $ 47,632,022,687
Productivity Value of Qualified Acres 11,563,746,185 11,563,746,185
Total Category D $59,195,768,872 $59,195,768,872

Final Values Worksheets

S.B. 4, passed by the 1999 Legislature, requires the Comptroller to certify alternative measures of school district wealth (T1, T3 and T4) in addition to the traditional measure (T2). Questions about the extent to which any of these wealth measures affect school funding should be directed to the Division of State Funding at the Texas Education Agency, telephone 512/463-9238.

T1 Loss to the Additional $10,000 Homestead Exemptions T2 50% of the Loss to the Local Optional Percentage Homestead Exemption T3 T4
$1,262,505,340,404 $45,341,125,305 $1,217,164,215,099 $12,928,692,142 $1,249,576,648,262 $1,204,235,522,957

T1 = School District Taxable Value Before the Loss to the Additional $10,000 Homestead Exemption.

T2 = School District Taxable Value After the Loss to the Additional $10,000 Homestead Exemption.

T3 = T1 Minus 50% of the Loss to the Local Optional Percentage Homestead Exemption.

T4 = T2 Minus 50% of the Loss to the Local Optional Percentage Homestead Exemption.

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