2.5% Property Tax cap (Austin: crime, houses, construction)

[CarnivalGal]

Originally Posted by DashRiprock

I don't know the overall tax structure of Washington state, but one problem with Austin is that we spend exorbitant amounts of money on stupid hipster feel good stuff like a state of the art library that nobody needed on one of the most valuable pieces of real estate in the city. I tune out most of the councilmembers when I hear them on the radio or whatever but when I do listen, it's always some gobbledegook about paying for affordable housing or some magic program to end homelessness or something. There's never any acknowledgement that the housing problem is, at least in part, due to the excessive and ever increasing property tax burden.

But we need more bike lanes! How are we going to do this with only a 2.5% increase every year?

[tom331]

Originally Posted by CarnivalGal

But we need more bike lanes! How are we going to do this with only a 2.5% increase every year?

The 2.5% increase is just the tax rate without requiring voters approval. When the city asked voters for the bonds, The bond packages were passed every time! I guess that it would be passed if city asks for 8% rate increase by the Austin voters. I guess that most of the voters voted for the bond packages might not own a property.

The Mayor keeps saying the the property tax increase is due the school tax, but City and County are receiving more money from property tax every year. The property owners are actually leasing the properties form the local government and pay the rent (property tax) to the landlords (city, county and school) yearly.

[CarnivalGal]

Originally Posted by tom331

The 2.5% increase is just the tax rate without requiring voters approval. When the city asked voters for the bonds, The bond packages were passed every time! I guess that it would be passed if city asks for 8% rate increase by the Austin voters. I guess that most of the voters voted for the bond packages might not own a property.

The Mayor keeps saying the the property tax increase is due the school tax, but City and County are receiving more money from property tax every year. The property owners are actually leasing the properties form the local government and pay the rent (property tax) to the landlords (city, county and school) yearly.

And if a bond package doesn't pass, the city just puts it on the ballot again and again until it finally does, usually with wildly confusing wording so that half of voters don't even know if they are voting for or against it.

[Roadking2003]

Originally Posted by tom331

The State wants to limit the power of local entities from increasing the property tax in high rate from year after year, but city of Austin council members and mayor against the proposal. For me, even the 2.5% yearly increase is too much.

I have a property in Seattle area. The appraisal value was $523K last year and the property tax was $4,943. This year, the appraisal value was increased to $577K, but my property tax is dropped to $4,738. There is no state income tax in Washington either. Why the property tax rate in Austin is more than double comparing to what I paid at Washington?

State and local taxes are much more complex than that. You have to look at all state and local taxes to compare. And then it will depend on your financial profile. For example, a person with a high income and low property value will pay more taxes in a high-income tax state. and a person with a low income but high-value property will pay more in a high property tax state.

Examples of WA vs TX taxes

Sales tax; WA 10.4%. TX 8.25%

Gas tax: WA 68.7 cents. TX 38.4 cents

Diesel tax: WA 73.8 cents. TX 44.4 cents

Neither state has an income tax

Property taxes are too complex to compare generally due to exemptions and frozen rates.

[atxcio]

From my understanding, this 2.5% cap is not going to help taxpayers much. I don't think it applies to ISDs, which are the majority of our property tax bills. City and County taxes combined, in Austin, are only about .8 of the total tax rate of 2.33% that we pay.

Also, this cap would be across the board to any owner, commercial or residential, whether they live here on not.

A much better plan IMO would have been to cap the appraised value increase on your homestead to 2.5% (down from the existing 10%). That way, the benefits would stay with owner-occupied properties, rather than investors -- thus better targeting the problem of people being taxed out of their home.

[Trainwreck20]

Originally Posted by atxcio

A much better plan IMO would have been to cap the appraised value increase on your homestead to 2.5% (down from the existing 10%). That way, the benefits would stay with owner-occupied properties, rather than investors -- thus better targeting the problem of people being taxed out of their home.

Or (or also) increase the homestead exemption significantly. As a side effect, though, a stringent cap on HSE increases in valuation could affect the economics of moving when the market is rapidly increasing.

[ATX Wahine]

Originally Posted by CarnivalGal

And if a bond package doesn't pass, the city just puts it on the ballot again and again until it finally does, usually with wildly confusing wording so that half of voters don't even know if they are voting for or against it.

This habit drives me INSANE. Complete disregard for the vote of us citizens. Re-name and re-package and repeat at next election. $&@%!!!!!!

[CarnivalGal]

On the radio, they said that the city's income from taxes has outpaced inflation just on the increased home values alone, not even rate increases. So technically they are taking in more money than they ever have. What are they doing with it?

[Trainwreck20]

The non-school tax rates have actually gone done from where they were historically. And the AISD portion of tax increases (2/3 of the bill) mainly leaves the district to fund the rest of the state. Almost 50% overall and that percent has been rising, so of the 'new' tax income, much more than 50% of the AISD portion has been leaving the area.

[atxcio]

Originally Posted by CarnivalGal

On the radio, they said that the city's income from taxes has outpaced inflation just on the increased home values alone, not even rate increases. So technically they are taking in more money than they ever have. What are they doing with it?

Like Trainwreck mentioned, the rates haven't increased, in fact they decreased. But not to the extent it prevented property taxes from continuing to rise rapidly, if that makes sense.

As for taking in more money than they ever have, that would seem to be a logical thing. The city has been growing in size, not declining. More properties, more construction, annexation -- it all means the taxes taken in will increase. Of course, it also means more spending -- police, fire, road maintenance, and yes libraries, parks, trails etc -- those thing all need to increase as the population does. I'm not defending the city against wastefulness, it certainly has its share of that. But in general, increasing budgets in a growing city are to be expected.

Now, back to the 2.5% thing. Here is another idea: mandate that the property values be adjusted every 3 years instead of every year, or when a property is sold. Some places in the state already do it that way. Sure, the tax entities might be more likely to increase their rates, but the CADs *should* be able to drastically reduce expenses by not having to go through the re-valuation process every year. I'm sure Texas ProTax would probably lobby against such a rule...