Property values across Harris County are down four percent overall. That seems like a small number, but it could have a huge impact on cities and possibly you the taxpayer, because taxing entities will collect about $350 million less this year. To make up for the shortfall, taxing entities could end up raising your taxes in order to pay their bills.
HCAD Chief Appraiser Jim Robinson said,"Put another way, that's about $11.5 billion or $11.6 billion less in taxable value that the county will have."
For communities that use tax money to provide services, the lower values mean less money. Across Harris County, $350 million fewer tax dollars will be raised this year than last. That means budget cuts or possible tax rate hikes or some form of both.
HISD officials say they've trimmed their budget shortfall down to a $7 million deficit, but they expect the state to help make that up.
"I did save about $15 million that we cut last year and did not put in last year's budget, so that we would at least have a running start this year with funds that will be available," explained HISD CFO Melinda Garrett.
As for homeowners. lower values means less they will have to pay in property taxes but, even with falling or stagnate values, some tax consultants advise you to protest the values anyway.
Property Tax Consultant Paul Bettencourt said, "What you can do in a recession is you can actually lower the value and use that as a base unit to go forward on protests in the future."
I spoke with several county agencies today and most have anticipated this drop in tax revenue. That's why many have already put in hiring freezes, cut raises this year or cut services. We are being told the shortfall could be even more severe, these are only preliminary projections.
In the worst case scenario, tax rate hikes may be the last thing communities want to pass along but they are not off the table just yet.