It's Time To Fix Property Tax Appraisal Problem

Last year, Gov. Perry and the Texas Legislature passed a new school finance bill [albeit not a very good one] that was supposed to lower taxes on property. But we found out that lowering the property tax rate does not neccessarily translate into lower property taxes. Most Texans are now finding their taxes are still as high or higher than they were before the new law.

How did this happen? Since they couldn't raise the tax rate, many local government entities simply raised the appraisal value of the property -- kind of a "backdoor" rise in taxes. While they were telling their constituents that they were not raising taxes, they were raking in more tax money than ever because of a rise in appraisal values.

Technically, the local taxing entities were correct -- they did not raise the tax rate. But governments need to stop using this white lie. If a homeowner must pay more tax this year than he did last year, then his taxes have been raised, whether the tax rate went up or not.

Perry has had a task force investigating what can be done to prevent these "backdoor" tax hikes, and they are supposed to report their findings by the end of the year. Some suggestions for fixing the problem are:

1. Cap appraisal value rises at 3%-5% a year [the current appraisal cap is 10%].

2. Require appraisal review boards to have at least some elected members.

3. Allow voters to approve or reject spending that exceeds a certain level.

4. Replace lost local revenue with a 1/2 cent sales tax.

5. Eliminate property taxes and replace them with a higher sales tax.

6. Allow local governments to increase taxes based on a formula using population growth and the consumer price index.

Whatever happens, the legislature needs to fix this tax problem. In the current system, it is pointless to talk about tax rates unless appraisal values are also discussed. As our governor recently discovered, to address one and ignore the other is to leave the door wide open for higher taxes.