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2003 Annual Property Tax Report

Texas Taxing Units Levy $29 Billion in Local Property Taxes

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In tax year 2003, 3,702 local taxing units levied almost $29 billion in property taxes, about 6 percent more than in 2002, as reported in the Texas Comptroller’s Annual Property Tax Report for Tax Year 2003.

Texas Comptroller Carole Keeton Strayhorn published the annual report on property taxes, as required by Tax Code Section 5.09. The annual report includes the total appraised values of each CAD and the taxable value, tax rate and taxes of each taxing unit reporting to the Texas Comptroller.

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

In each of the state's 254 counties, a single appraisal district determines the appraised value of taxable property. Potter and Randall County Appraisal Districts have formed a single appraisal office in Amarillo. Local governments levy property taxes based on the property values set by the county appraisal districts.

2003 property taxes

Table 1 compares tax levies from 2002 to 2003 by type of taxing unit. School property taxes—imposed by 1,031 independent school districts and representing about 60 percent of total property taxes—increased about 5 percent to total almost $17.3 billion in 2003.

Table 1 - Property Taxes Reported by Unit Type - 2002 vs. 2003
  Tax Year 2002 Tax Year 2003
Unit Type No. of Units Tax Levy % Tax Levy No. of Units Tax Levy % Tax Levy % Increase
School districts*1.033$16,418,788,831 60.1% 1,031 $17,264,153,972 59.8% 5.1%
Cities 1,031 $4,186,795,363 15.3% 1,040 $4,415,212,819 15.3% 5.5%
Counties 254 $3,849,728,346 14.1% 254 $4,121,758,950 14.3% 7.1%
Special districts 1,337 $2,864,454,984 10.5% 1,377 $3,092,285,295 10.7% 8.0%
Total 3,655 $27,319,767,524 100.0% 3,702 $28,893,411,036 100.0% 5.8%
*Includes:
County Equalization   $26,870,618     $27,559,332   
South Texas ISD   $9,140,424     $10,527,193   
Totals may not add due to rounding. School district consolidations occurred from 2002 to 2003.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

The total school taxes include local property taxes by seven county school equalization districts and by South Texas ISD, a school district that operates tuition free magnet schools for students in a three-county area.

Nine new cities pushed the number of taxing cities to 1,040 and increased city property taxes to exceed $4.4 billion, more than a 5 percent increase.

County property taxes increased more than 7 percent to $4.1 billion in 2003.

The levy of special districts rose by 8 percent to pass $3 billion, with 40 new special districts levying a property tax.

Table 2 shows the growth in property tax levies by the four major types of taxing units since 1985. Comparing tax years 1985 and 2003, the total of all taxing units' property taxes grew 222 percent.

Table 2 – Growth of the Property Tax by Unit Type, 1985 – 2003
Tax Year Special District
Levy		 County Levy City Levy School Levy Total Property
Tax 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
*1991 and 1992 include County Education Districts.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Property taxes vs. 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. The analysis shown in Table 3 and Figure A looks at 2002 property taxes of $27 billion, which local governments spent in calendar year 2003, versus state and other local taxes collected and spent in fiscal 2003, which ended August 31, 2003.

Table 3: State and Local Sales and Property Taxes as a Percentage of Total Major Taxes
Type of Tax Tax Amount for Fiscal 2002* Percent of Total Tax Amount for Fiscal 2003** Percent of Total
Property Tax $25,310,416,025 45.6% $27,319,767,524 47.6%
State Sales Tax $14,516,341,226 26.1% $14,277,286,162 24.9%
Other State Taxes $11,762,805,267 21.2% $11,849,389,262 20.7%
Local Sales Taxes*** $3,970,173,894 7.1% $3,914,416,742 6.8%
Total Taxes $55,559,736,412 100.0% $57,360,859,690 100.0%
* Uses the 2001 local property tax levy that local governments spent in fiscal 2002. Includes other local taxes as well as the major state taxes, which were collected and spent in fiscal 2002, ending August 31, 2002.
** Uses the 2002 local property tax levy that local governments spent in fiscal 2003. Includes other local taxes as well as the major state taxes, which were collected and spent in fiscal 2003, ending August 31, 2003.
** Does not include local utility, hotel/motel, mixed beverage and other taxes.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Pie Chart

Using this comparison basis, major state and local sales taxes and property taxes in 2003 totaled more than $57 billion.

Property taxes remained the single largest type of tax at almost 48 percent of total Texas taxes.

State sales taxes, the next largest revenue source at $14 billion, represented 25 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, "sin" taxes and others, the state's share of the total tax levy is just under 46 percent.

Local city and county sales taxes, along with metropolitan transit authority (MTA) taxes, were almost 7 percent of the total.

Freeport exemption

One exemption highlighted in the Annual Report is the “freeport” exemption. Tax Code Section 11.251 defines freeport property as goods temporarily held in Texas for up to 175 days for assembling, processing, manufacturing, storage or other purposes.

Texas law was patterned 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 passed Tax Code Section 11.251 titled "Tangible Personal Property Exempt" but no one called it that. With the term "freeport goods" in the first subsection, taxpayers and local tax officials refer to it as the freeport exemption.

In 1990, school districts, counties, cities and junior college districts had to choose whether or not to tax freeport property. State law required other special districts, such as water districts or hospital districts, to exempt freeport property, beginning in 1990.

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 25 taxing units to 297 units in tax year 2003. The amount of value exempted for these taxing units increased by $0.5 billion, or about 2 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 4 lists the total exempted value by counties, cities and school districts for the freeport exemption for 2002 and 2003.

Table 4 - Taxing Units that Exempt Freeport Property
Types of Taxing Units That Exempt Freeport Property * 2002 Number of Units 2002 Taxable Value Loss 2003 Number of Units 2003 Taxable Value Loss
County 46 $10.3 billion 49 $10.1 billion
City 115 $9.6 billion 127 $9.7 billion
School District 113 $10.0 billion 121 $10.8 billion
Total 274 $29.9 billion 297 $30.6 billion
* State law provided that counties, cities and school districts had a choice to tax or exempt freeport property.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Report available

The Texas Comptroller’s Annual Property Tax Report for Tax Year 2003 is available on the Web. The agency sends one copy to members of the Texas Legislature and to each county appraisal district and county tax office.

To order the Annual Report, send a check or money order for $10 made out to the Texas Comptroller of Public Accounts to the Texas Comptroller’s Property Tax Division, P. O. Box 13528, Austin, Texas 78711-3528.

For more information, please e-mail the Comptroller’s Property Tax Division at ptd.cpa@cpa.state.tx.us. Or, call the Property Tax Division at 1-800-252-9121, option 2. In Austin, call (512) 305-9999.