Most local tax rates are expected to either hold steady or decrease after a state legislative session that sought to constrain property tax growth.
But for most taxpayers, the new tax rates will not translate to lower tax bills.
Taxable home values across the county continued to rise this year, more than offsetting the tax rate cuts that several local school districts are offering as a result of new state taxation policies.
The overall tax burden — the cumulative impact of city, county, school and college taxes — is continuing to increase as it has for several years.
For example, while McLennan County is proposing to keep its tax rate steady at 48.53 cents per $100 valuation, the average home’s taxable value has risen 9.4%. That means the average county tax bill will increase by $60.69, to $707.57.
A similar growth trend in Waco will add $100.52 to the average city of Waco tax bill, which is holding its tax rate steady.
District 4 Councilman John Kinnaird said taxable values and revenues have grown as a result of new construction and rising real estate prices.
“Our valuations and the average home price have been increasing, but I think those are starting to slow down a bit,” Kinnaird said. “Other communities within our Texas triangle from DFW to Houston to San Antonio and this area, we’ve all been experiencing similar valuation increases.”
As in Waco, the average taxpayer in Hewitt and Woodway would see a tax increase despite a steady tax rate, while Robinson and Bellmead are set to pass small tax rate increases in addition to the property tax base growth. Lacy Lakeview residential taxpayers would see a 1.3 cent reduction in the tax rate but an average tax increase of more than $20.
The state’s new school finance reform law, which advanced as House Bill 3, requires school districts to cap annual property tax revenue growth at 2.5%, forcing some school districts, including the Waco and Midway school districts, to cut their tax rates. The state also set aside $5.1 billion to offset some of the local property tax revenue loss.
But with the exception of Robinson ISD, which aims to cut its tax rate by 12 cents and lower the average tax bill by more than $27, most districts will see higher tax bills.
Here is a roundup of local school district and other taxing entities that are seeking public input on tax decisions.
McLennan County Tax Burdens 2019
|Tax Rate 2018||Tax Rate 2019||Tax Rate Change||Total Taxable Value 2018||Total Taxable Value 2019||Total Taxable Val. % Change||Avg. Taxable Home Value 2018||Avg. Taxable Home Value 2019||Home Value % Change||Avg. Tax Bill 2018||Avg. Tax Bill 2019||Tax Bill Change|
|China Spring ISD||$1.3587||$1.2941||($0.065)||$787,819,164||$870,873,390||10.54%||$201,676||$223,269||10.71%||$2,740.21||$2,889.35||$149.13|
|La Vega ISD||$1.394||$1.2903||($0.104)||$882,683,346||$947,574,150||7.35%||$62,911||$70,914||12.72%||$876.98||$914.98||$38.08|
Waco Independent School District will hold a public hearing at 7 p.m. Thursday on lowering its tax rate by 10 cents. But with average home values increasing by some 12%, the effect will be a tax hike of $52.66 for a typical homeowner.
The 10-cent tax rate decrease will cost Waco ISD $525,000, but even so, the district expects to bring in $70.6 million in property tax revenue.
The district is also counting on new state funding approved in this legislative session to help pay for a 7.6% teacher pay increase as part of a $5.9 million boost in employee compensation.
Meanwhile, the Midway Independent School District is proposing a 7 cent decrease in its tax rate. The new tax rate would be $1.25, down from last year’s rate of $1.32. The average homeowner with a house valued at $225,000 would receive roughly $160 in savings with the proposed tax rate, Chief Financial Officer Wesley Brooks said.
But the Midway school board has called a $148 million bond election for Nov. 5 that, if approved by voters, would still allow the board to cut the rate by 1 cent more.
Midway ISD would receive about $1.02 million more in local tax revenue this year than last year, despite the lower tax rate, because of rising property values. The district expects to receive $69.7 million.
City of Waco officials are also bracing for new tax restrictions that will take effect next year.
A new state law will require voter approval if a city or county raises tax revenue by more than 3.5%, though new construction is exempt from that calculation.
Councilman Kinnaird said that could be a challenge in future years.
“This year, you could grow your revenue dollars from property taxes up to 8% without triggering an election,” Kinnaird said. “Going forward, it’ll be 3.5%.”
He said the city has kept its tax rate steady at 77.62 cents per $100 since 2013, when the council approved a 1 cent increase. Under the current rules, the city could raise the tax rate up to 81.86 cents without requiring a rollback election.
City of Waco officials have said they plan to use the additional revenue to hire new police officers and spend $21 million on street improvements.
The city will hold a public hearing on the tax rate at 6 p.m. Tuesday at the Waco Convention Center.
The city of Hewitt is set to approve its budget and tax rate for the new fiscal year Monday night, and city leaders were able to keep the tax rate the same while generating an additional $468,000 in tax revenue.
Hewitt City Manager Bo Thomas said new construction accounts for $150,789 of that total and increased appraisal values make up the rest.
The new budget includes money to replace three police vehicles and one fire department pickup. It also includes $95,000 to buy a new backhoe for the utilities department, Thomas said.
Also, the city has budgeted about $750,000 for street maintenance and upkeep and $350,000 for utility work associated with street projects.
Thomas said city leaders have set aside about $325,000 to finance 3% across-the-board raises, plus step raises and civil service raises of up to 13%.
In Woodway, the tax rate will remain the same as last year, but City Manager Shawn Oubre said values have increased 7.6%.
The Woodway City Council is scheduled to have its second public hearing on the proposed budget and tax rate at 5:30 p.m. Monday.
Oubre said the city is setting aside $500,000 in the new budget for renovations to the Community Services building on Estates Drive, which houses the city public works, inspection, permitting and other departments.
The new budget also includes $186,000 to build restrooms at Woodway Park No. 1 and Woodway Park No.2 near Lake Waco, Oubre said.
The council also voted to give a 2%, across-the-board raise to city employees.
The Robinson City Council will hold a hearing at 6 p.m. Monday on a proposed tax rate of 49.95 cents, up 1.5 cents from the current rate.
The Robinson city manager had proposed a 1-cent tax increase to boost police salaries and set aside an additional $155,000 for street maintenance. But some council members have urged an extra half-cent to accelerate work on crumbling streets.
In Lacy Lakeview, City Manager Keith Bond said even with a tax rate decrease, the city will bring in $39,518 more than last year.
Lacy Lakeview also has a public hearing set for Monday night on the new budget, which includes a 6%, across-the-board raise for city employees, money to purchase heavy equipment and to perform street repairs and maintenance, Bond said.
The city of Bellmead, which has one of the lowest tax rates in the area at just under 32 cents per $100, is considering a 4-cent increase to enhance police and parks services.
Interim City Manager Yost Zakhary said that would include an additional police officer, an additional parks worker and a rebuilt splash pad at Brame Park.
“These are all quality of life issues,” he said.
McLennan County commissioners are proposing a steady tax rate of 48.52 cents per $100 that would bring in an additional $6.2 million.
Some of that money would fund the county’s takeover of management at the Jack Harwell Detention Center on Oct. 1.
“The transition costs have primarily been personnel and equipment-related,” County Auditor Frances Bartlett said. “The estimate of what the 2019 transition costs will be is about $800,000.”
The proposed operating budget for running the detention center is $9.94 million, compared with about $8 million a year the county has been giving to a private contractor to operate the facility. But Bartlett said the county is also set to receive almost $1.9 million in revenue from other entities for housing non-county inmates, revenue that previously went to the contractor.