Lower rates don't equal lower taxes
Last updated 8/11/2020 at 10:06pm
Orange Mayor Larry Spears Jr., a man of limitless positivity whose glass is always overflowing, reacted with great joy Tuesday morning when Cheryl Zeto, city finance director, reported that property tax values in the city had increased by $13.7 million this year.
“It’s always a good thing to find out your values have increased, isn’t it?” he said.
Is it? Depends on your glass.
Rising property values mean taxing entities (county, city, schools, special districts) can lower their tax rates and still take more of your money.
The tax rate is only one of two things that determine a taxpayer’s bill. The other is property value, and property values across Orange County have gone up average of 3.7% this year.
• To determine what your tax bill will be, multiple the taxable value of your property times your tax rate and divide by 100.
And do it for every taxing jurisdiction in which you live. Don’t forget that each entity may value your property at a different amount.
Another important note: these tax rates ARE NOT FINAL, with the exception of West Orange-Cove, which has already finalized its budget and its board voted to actually take less tax money from its stakeholders for 2020 taxes.
It will be several weeks before rates are locked in and taxpayers will have the opportunity to publicly voice their opinions at one public hearing before the final vote, which in some cases will be at the same meeting at which the final rate is voted upon.
The only thing locked in now is that those taxing entities cannot decide on a rate higher than the proposed tax rate. And few are calling for that.
“Since this [Orange County’s proposed tax rate] appeared in the paper, my phone has blown up on me,” County Commissioner Theresa Beauchamp said in Tuesday’s Commissioners Court meeting.
Orange County commissioners were one of three local governments to propose a raise in their tax rate, along with Pinehurst and the County Drainage District.
Last week, commissioners voted 4-1 for and published a proposed rate of 0.58648, or 58.648 cents per $100 property value, which is a raise from 54.2 cents per $100 value.
“I try to explain to them this rate is only proposed, that we’re trying to keep the budget tight,” Beauchamp continued. “I try to tell them the price of equipment is going up, that everything is going up.
“Their answer is, they don’t care. They don’t want taxes to go up.”
Tuesday, by a vote of 5-2, the City of Orange voted to propose a lowered tax rate of 0.8059, compared to last year’s rate of 0.8069. Those numbers translate to 80-point-something per $100 of property value, so the tax rate cut of .001 equals a tenth of one cent per $100 value.
That glass probably isn’t so full.
Especially since the rise in values will cause city taxpayers to shell out more green.
If you own a home in Orange with a 2020 average taxable homestead value of $96,614, the rate cut mounts to less than a dollar (93.89 cents) on your tax bill.
But when you consider last year’s tax rate of .80690 and last year’s average taxable homestead value of $93,897, your 2019 city tax bill was $757.65.
This year, the average taxable homestead value in the city of Orange is up 3% to $96,614. And with a tax rate of .80590, the 2010 city tax bill for that property will be $778.61, an increase of $20.96.
Council members Terri Salter and Brad Childs voted against the proposed city tax rate of .80590.
“I am not for an increase,” Salter said. “This Covid-19 pandemic is for real. People in all cities across our nation have been hit hard economically. I am sure some of our citizens are feeling the strain.
“The last thing people need at a time like this is more financial obligations with less coming in.”
Childs did not return telephone and text requests for comment after the city council meeting, which was held via conference call because of the coronavirus.
But the men tasked with leading two of the three entities open to a rate hike say they need more money each year to deliver on citizens’ demands.
“You tell me what you want me to cut,” County Judge John Gothia said. “I know when I call the Sheriff’s Office they’ve got people that can respond.”
Don Carona, general manager of the Orange County Drainage District, saw his commissioners propose a half-cent per $100 value raise in its relatively tiny tax rate Tuesday morning, from 13.16 cents to 13.67 cents per $100. He said his office is adding seven to eight employees in 2020 and some equipment.
“We have a lot of people in the county who, as a result of the storms, want us to do more jobs and do them quicker,” Carona said. “This [higher rate] enables us to add a couple of crews and do more jobs.”
All area school districts proposed lowering their tax rates, but if those decreased proposed rates stick, all except West Orange-Cove will pay more in taxes.
Owners of the average homestead-exempted houses will pay $41.95 more in school taxes in Bridge City ISD, $35.77 more in Orangefield ISD and $34.75 more in Little Cypress-Mauriceville CISD, based on multiplying higher property values times the lower tax rates.
Average homestead property values in the WOCCISD actually dropped this year. And the school has a rich industrial base in the petrochemical plants at Chemical Row to pay its bills.