Some Houston-area local governments bringing in more property tax revenue despite not raising taxes

HOUSTON, Texas (KTRK) — Some local governments in the Houston area continue to rake in more property tax revenue despite not raising taxes.

According to an ABC13 analysis of local data, 67% of local cities and counties raised their tax revenue this year, including bringing in more money than the year before, which is a tax increase, according to the state.

ABC13 spoke with John Diamond, Ph.D., director for the Center for Tax and Budget Policy of the Baker Institute for Public Policy at Rice University.

“There’s the rate and then there’s the value of your property. So, it’s the multiplication of those two things that determines how much you pay. So, if the rate is constant, but the value of your house goes up, you pay more in taxes. Even if the rate falls a little, if the value increases by more, you can still pay more in taxes,” Diamond said.

On Thursday, Harris County approved one of the largest tax increases in recent history.

Accounting for Harris County, Port of Houston, flood control district and hospital district, the rate will climb from $0.6241 to $0.6715 of $100 of appraised home value, after Thursday’s vote.

The new rate will equate to a property tax increase of around $190 for the average homeowner in the county, according to the Harris County Office of Management and Budget.

Diamond and other experts argue that property taxes are necessary to fund the local governments unless you incorporate another source of revenue to fill the gap.

“So, you could replace property taxes with sales tax. I actually wrote a paper on that. You would have to increase the sales tax rate. So, if you got rid of all property taxes, the state sales tax rate would have to be in the 24 to 26% range,” Diamond said.

Some experts told ABC13 there should be some property tax reform that will ease the burden on homeowners.

“A lot of these localities and they do face budgets and their costs have also gone up, but it’s disproportionate. You know, households aren’t seeing their incomes go up by 6% or 7% a year and so the county and state or the county, city, school districts, they should be restricting the growth in property taxes to match more of the income growth of households,” Diamond said.

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