County property tax rolls may have increased 4 percent from 2011 to 2012, but shifting sands of fortune tell a different story in communities from west to east across Denton County.
On the county’s west side, the tax rolls for cities and school districts have been shrinking as the rolls swell on the county’s south and east side.
Values increased nearly 2 percent in Carrollton and more than 3 percent in Lewisville. Roanoke added $100 million to its commercial-heavy tax base, an increase of nearly 8 percent. Sanger also increased its tax base by about $30 million, an uptick of nearly 9 percent.
Meanwhile, many cities on the county’s west side saw declines, ranging between 1 percent to 3 percent drops in Bartonville, Justin, Dish and Ponder, to a 5 percent slide in Argyle. School districts, which cover wider areas of land and property, saw decreases, too. Argyle schools dipped 1.5 percent and Krum schools slipped 5 percent. Values in the Ponder school district decreased 7 percent between 2011 and 2012.
Tax values among some of the county’s top 10 taxpayers have dropped even more.
Values for Devon Energy, the county’s top taxpayer since 2002, peaked in 2009 and has dropped 35 percent since then. Mineral interests held by Burlington Resources Oil & Gas — also on the top 10 list — have dropped further, about 62 percent from a peak in 2010.
Overall mineral values, most coming from natural gas operations on the county’s west side, have dropped $1 billion since 2006. Moreover, of the $1.7 billion of mineral values still on the rolls in 2012, about 65 percent came from companies in the top 10.
County Judge Mary Horn said that the county began tracking the top 10 taxpayers when she served previously as the county tax-assessor collector. People had been asking about it.
“It’s really interesting information, but it’s not used to compute anything,” Horn said.
According to Denton Central Appraisal District records, utility companies and real estate partnerships dominated the list of top 10 taxpayers from 1996 to 2002. After buying Mitchell Energy Co. in 2002, Devon Energy debuted at the top of the county’s top taxpayer list with $225 million in taxable values, more than twice the appraisal for Mitchell the year before. By 2007, Devon Energy, Burlington Resources Oil & Gas and EnCana Oil & Gas ranked first, second and ninth, respectively, with a combined $1.1 billion in taxable values. The next year, Devon’s taxable interests alone came in at $1.1 billion.
In 2010, six of the top 10 taxpayers were natural gas operators, but by then taxable values were already slipping. In 2012, four operators remained among the top 10, Devon at the top and Burlington at the bottom. Two new names are on the list — Barnett Shale Operating, which took over some assets of Quicksilver Resources and EnerVest Operating, which bought EnCana Oil & Gas assets.
Nationwide, policymakers should expect these things to ebb and flow, Horn said.
“This sort of thing can dry up just as fast as it started,” Horn said, adding that she knew some pockets of the county weren’t doing too well.
Mineral values make up a large portion of the property tax base for school districts that serve the western side of the county, including Ponder and Krum.
More than half of the tax base for Ponder schools has come from mineral valuations for the past five years. The district has seen those values decline by 30 percent, or about $186 million, since 2008. In Krum, values declined 43 percent, or about $148 million, in the same time period. Mineral values were about 45 percent of the Krum school district’s tax base in 2008. This year, minerals are about 30 percent of Krum’s tax base.
Ponder Superintendent Bruce Yeager said values don’t have a large impact on day-to-day operations but could impact the district’s interest and sinking fund, which uses generated local revenue to pay bond obligations. The district has about $41 million in outstanding principal and interest.
“It will have a slight impact on us, but not a great one,” he said.
It’s a possibility there could be an increase in the district’s property tax rate of $1.34 per $100 valuation, Yeager said, but that will be a decision of the school board.
Paying for day-to-day operations, known as the maintenance and operations fund, comes together with a combination of local, state and federal revenue — a formula calculated from average daily attendance and the amount of local property tax collected. But a school district’s ability to pay its bond debt, which is used to finance construction, equipment or both, comes entirely from local property taxes.
Yeager said he is uncertain how decreasing values could affect the district over the long term. The Ponder school district will have to wait and see what the Texas Legislature does with education funding when it reconvenes next year, he said.
The Krum school district has about $85 million in outstanding principal and interest. Krum Superintendent Mike Davis wrote in an e-mail last week that “negative values have adverse effects on [interest and sinking].”
He does not anticipate a change in the district’s property tax rate of $1.54 per $100 valuation and has said that board members may examine whether reserves are needed to pay debt obligations for the 2012-13 year.
While some schools and cities have a large percentage of mineral values in their tax bases, Denton County does not. Mineral values were less than 1 percent of the county’s tax base in 2000 and rose to 6.5 percent of the county’s tax base in 2006. By 2012, that dropped to 3.2 percent.
“Overall, we’re grateful,” Horn said. “We’re pretty diverse in our tax base.”
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com.
BRITNEY TABOR can be reached at 940-566-6876. Her e-mail address is btabor@dentonrc.com.
TAX BASE COMPARISON
$22.1 billion — County property tax base, 2000
$42.2 billion — County property tax base, 2006
$54.6 billion — County property tax base, 2012
0.2 percent — Mineral values in 2000 tax base
6.5 percent — Mineral values in 2006 tax base
3.2 percent — Mineral values in 2012 tax base
SOURCE: Denton Central Appraisal District certified tax rolls, 2000-2012
