Giant industries don’t even pay half their fair share; valuations at 40 percent of true value are commonplace. . . . . while the properties of small, hometown businesses are often taxed on 110 percent of their real worth. Texas Property Taxes: The Una Fair Deal By Jim Highthwer and Tim Mahoney Austin No matter what Californians did on June 6, and no matter how loudly this state’s right-wing politicians beat their drums and whoop in the night, there simply is no comparable citizens’ revolt in Texas against the size of our property tax bills, and for one good reason: most of us don’t pay all that much. Latest figures of the Census Bureau show that Texas’ ad valorem levies add up to $213 annually per capita \(equivalent to 3.4 Star state’s property tax burden only 29th in the nation. This hardly means that all is well with Texas’ property tax structure, howeverit’s not by a long shot. Governor Briscoe, Speaker Clayton and some of their fellow travelers prate about putting limits on local and state tax increases, but they deliberately skirt the real issue that’s agitating people all over the statenamely, that our property taxes are applied with gross unfairness. As a general rule, those Texans who possess the most valuable properties get away without paying their full share, while less well-to-do Texans are made to take up the slack by paying a higher effective rate than their rich neighbors. Not only is such discrimination unfair, it is illegal. The Constitution of 1876 is blunt and to the point: “Taxation shall be equal and uniform.” There’s more. The Constitution also says plainly that “All property in this state, whether owned by natural persons or corporations, other than municipal, shall be taxed in proportion to its value. . . .” Yet at least $600 billion worth of Texas property, most of it owned by wealthy individuals and corporations, goes entirely untaxed. That untaxed sum is three times the value of property now on the tax rolls. A madness to their methods While the state’s top officials have given it a big, collective wink, local property tax administration has become a hodgepodge of overlapping jurisdictions, inadequate assessment techniques, and old-fashioned discrimination. Property taxes account for some 25 percent of governmental revenue in Texas citizen just to sort out who is submitting the bills, let alone penetrate the mysteries of how they were computed. In addition to the state’s ad valorem levy, there are property tax assessments imposed by about 2,700 separate taxing jurisdictions, including 254 counties, 780 cities, 1,091 school districts, 348 water and utility districts, and 246 other special jurisdictions covering everything from hospitals to roads. On paper, the process of taxing property seems a bit cumbersome, but not inherently unfair: the local assessor’s office makes an inventory of all properties in its jurisdiction, determines the fair market value of each \(what a willing buyer would \(that is, to that value, multiplies the resulting assessed value by the local tax rate, then mails a tax bill to the property owner. There are often other steps, but that’s basically how it works. Any complaint a taxpayer has about his or her bill can be taken to a local board of equalization and subsequently to court. Here’s a hypothetical illustration of the process: Inventory: Single-family house Fair market value: $40,000 Assessment ratio: 25 percent Assessed value of house: $10,000 Tax rate: $1 per $100 of assessed value Tax due on house: $100 THE TEXAS OBSERVER
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