For the second consecutive year, local taxing agencies are imposing tax rate increases. With Austin real estate values down, the tax authorities claim they must raise the tax rate to bring in the same amount of revenue as collected last year. Travis County authorities state the value of the average home dropped from $272,931 to $270,677.
Why Does Austin Need More Property Tax Revenue?
Funds generated by the higher tax rates will be used to pay salary increases for public employees, increased health insurance premiums and retirement contributions. Additional expenditures to renovate the county’s executive office building, the Travis County Jail, maintenance for county property such as computers, vehicles and roads are in the mix as well.
Mostly to Pay City Employees
On August 1st, Austin City Manager Marc Ott presented to the Austin City Council a $3.1 Billion dollar budget for the 2013 fiscal year that proposes property taxes increase to 50.29 cents per $100 evaluation from the current 48.11 cents per hundred dollars. The budget increase reflects a 3 percent pay raise for city employees. Moreover, city staff predicts an additional property tax rate increase of 3.3 cents per hundred dollars in property value during the next five years.
Schools Need More Revenue Too
Other taxing authorities, such as, Central Health and the Austin Community College have either proposed or approved tax rate increases due to lower home values. The Austin Independent School District predicts that voters may be asked to approve a hike to AISD’s tax rate in the near future. The AISD Board is considering a tax ratification election this year or next. The AISD Superintendent noted that reserves are insufficient to support of such recurring expense indefinitely so a tax ratification election is likely.
Think Your Home is Valued too High?
On the other side of the coin, a mechanism is in place for home owners who feel their homes have been over-valued to challenge tax assessments. Stay tuned for more about that in a future commentary.