Homeowners Facing Jaw-Dropping

County Property Tax Increase

Harris County officials spent a little over four hours on Monday discussing the County budget for next year. The proposed budget would increase County spending by about $327 million (12%).¹ For some context, Harris County’s population grew by just under 1% last year, and the inflation rate for our region for the last 12 months has also been in the 1-3% range.  So, a 12% increase in County spending is, at least three times the sum of inflation and population growth.

According to the County Budget Office, if the County does not raise its tax rate, it will have $109 million to cover increased expenses.² However, if it does not raise the tax rate, it will be $218 million short of covering all the increased spending planned in the proposed budget.  $109 million in increased spending would represent about a 4% increase over last year — roughly in line with the increase in inflation and population growth last year.

But that is not what the County has in mind. Instead, the draft budget proposes that the Commissioners increase the tax rate to just below what would require voter approval — the “Voter Approval Rate” (VAR). The meeting included little discussion of the impact of this on homeowners. However, buried on page 40, the proposed budget lays out the sobering reality — the average homeowner will see a 12.3% increase in County property taxes.

I am guessing you did not get a 12% pay raise last year.

This increase will come on top of historic tax increases over the last two years and additional proposed increases for Harris Health (formerly the Harris County Hospital District) and the Harris County Flood Control District.

The County seems hellbent on making it as unaffordable as possible to own a home in Harris County. Little wonder that over the last decade, over 300,000 County residents have moved out of the county.

Commissioners have scheduled another meeting to discuss the budget on September 8. You might want to contact your commissioner before then to let them know how you feel about property taxes going up by over 12% this year.

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Note 1: You can examine the increases for each department on this spreadsheet. By toggling the option in the column title, you can see which departments increased the budgets the most and the least in dollars and percentage. For example, the largest dollar increase ($89 million) is for “General Administration” (apparently related to increased health care costs), and the largest percentage increase is for the Office of Economic Equity & Opportunity (76%). Apparently, they have not read Judge Hittner’s opinion yet.

Note 2: For simplicity, I equate “not raising taxes” with adopting the state-defined no-new-revenue rate (NNR). Technically, the NNR rate is intended to generate approximately the same tax revenue from property taxed in both years, while allowing additional revenue from new construction. Because taxable values change, the NNR rate itself may be slightly higher or lower than the previous year’s rate.