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The Watchdog: We're on our own for property tax relief

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Dave Lieber, The Dallas Morning News

I owned a house in Texas for 17 years before I realized I could protest my property taxes. The tax bill was built into my mortgage payment like pepperoni on pizza, so I ignored it.

Finally figured it out in 2011 when I saw that an online tax protest was a new thing. I tried it, and with the click of a computer mouse easily knocked a few thousand bucks off my taxable value.

Since then, as The Watchdog, I've spread the word on how to challenge it (especially this year with my "Everybody File a Protest" campaign).

Similarly, until last year, I never paid attention to those boring quarter-page newspaper ads that appear every August and are bought by cities, counties and school districts. The ads announce the proposed tax rate for the coming year and accompanying public hearings.

The ads display lots of numbers and confusing terms. Unless you're a government geek, they're hard to understand. But these notices are probably the most important public document local governments share with their tax-paying supporters.

I rip them out of the local papers, then sort and analyze them. I look to see who's raising taxes, and who isn't.

It's a nerdy exercise, I know, but it's all part of my evolving understanding of how the Texas property tax system is unfair, secretive and subjective. These ads are supposed to clarify, but they are too legalistic and confusing to be easily understood.

The Texas Legislature adjourned the other day without action on half-baked property tax bills that floated in the statehouse air but never got a chance to land. The bills would have given voters approval on big government spending increases, meaning a chance to stop higher taxes in far easier ways than currently available. Now we won't get that.

Bottom line: When it comes to our property tax bills, we're on our own. No reform. No relief. No changes.

All we've got left is an appraisal protest and, at this time of year, a chance to oppose government budget increases.

That's why those boring quarter-page ads that appear every August are critical. If you're on your own, you need to know what they mean. I'll show you.

Collecting tax notices

This year, I've collected advertisements from 52 taxing entities. I have notices from 33 North Texas cities, three counties, three hospital districts, one college district and 12 school districts.

The Watchdog sorts them into good guys, bad guys and those in the middle.

The good guys are the ones who want to lower their tax rate a lot because they know that tax appraisals have increased so much in the past two years for property owners that unless they do, taxes will jump too much too fast.

The bad guys are the ones who say, to heck with it, we're increasing our tax rate AND taking advantage of the increasing taxable appraisals to really stick it to our folks.

The wishy-washy ones in the middle are those governments that keep their tax rate the same or lower it a little, all the while knowing that with appraisals jumping, they'll get more money anyway. They can brag on "no tax increase" even if there is one. Maybe wishy-washy is too wishy-washy a way to describe this hypocrisy.

How to read a tax ad

How do you tell who is good, bad or wishy washy?

State law requires city and county governments to publish in these ads four key numbers: the preceding year's tax rate and the proposed tax rate, both of which are self-explanatory. And the effective rate and the rollback rate.

The effective rate is a tax-cutters best friend. It's the tax rate that a government's operating budget requires to fully offset appraisal increases, which prevents tax increases. It's freezing government spending by adjusting the tax rate to match the previous year's allocation (based on the newest appraised value numbers).

The rollback rate shows a hypothetical 8 percent increase. If a government wants to increase this much or more, voters can call for an election to reject such a steep tax increase. But they must petition for an election first.

What are you looking for?

If you want to keep the cost of government down, you want your elected officials to vote to approve the effective rate.

If you love paying higher taxes, then you should be OK with your elected officials voting to increase their budget and your taxes just under 8 percent so they can avoid a rollback election.

Property tax math

Using Plano as an example: Last year's tax rate for every $100 of value was 47 and 86/100 cents. This year's proposed rate is 46 and 86/100 cents, or a penny less. Looks good, but wait.

The effective rate is 44 and 13/100 cents, meaning what's needed to match last year's revenue. Using my calculator, I see that though Plano is dropping its tax rate, the city is basically proposing a 2.73 cents per $100 increase. That's because Plano is increasing its rate above the effective rate by that proposed amount (when factoring in appraisal increases).

I know. It's a bit of work.

Your government's proposal

If you missed your city or county's published ad (as I'm sure most people did), you can search for the same information on a government's website.

The only improvement I saw in the failed bills in the Legislature for this required notice was the addition of what I'll label "call to arms" language. The House bill added that these tax ads state "you may express your support for or opposition to the proposed tax rate by contacting members of the governing body at their offices or by attending one of the public hearings mentioned."

As I say, that didn't pass into law.

One pattern I notice: Because appraisals jumped so much for so many, governments are often lowering their tax rates, but can still count on more property taxes. The red flag is if they're not lowering it enough to match their effective rate.

What is your city, county or school district's plan to raise or not raise taxes? Look for a notice on their government website. If a public hearing is pending, you may attend.

Check if a taxing entity is matching last year's tax rate with the effective rate to keep expenses and taxes low and propose no increases.

Remember that the tax rate times a property's taxable value (per every $100 of value) equals the amount of a tax bill.

School taxes make up the majority of a property tax bill.

Staff writer Marina Trahan Martinez contributed to this report.


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Call: 214-977-2952

Write: Dave Lieber, P.O. Box 655237, Dallas, TX 75265