Property owners in Ellis County are paying $89 million more in taxes than they did just five years ago, according to the 2018 annual report produced by the Ellis Appraisal District.
The most significant tax increases came from independent school districts, which have increased their taxes by $54,082,969.99 since 2014. City entities saw the second highest increases at $23,725,986.52 over that same span.
In total, taxes for all taxing units added up to $341,675,779.20 for 2018.
Ellis Appraisal District chief appraiser Kathy Rodrigue said many taxpayers share the same central concern — their property taxes are too high.
“Some taxpayers see the appraisal district as an adversary,” Rodrigue expressed. “We see ourselves as an advocate. We get why they’re angry.”
HOW DOES TEXAS COMPARE TO OTHER STATES?
According to the Tax Foundation, Texas ranks fifth highest in property taxes in the United States. There is a reason for that, however, as most states have a state income tax in addition to their property and sales taxes.
Texas is not one of those states.
Rodrigue explained that more emphasis is placed on the property and sales taxes because of this.
Rodrigue compared the state income, sales and property taxes to a three-legged stool. By removing the state income taxes, more stress is placed on the two other legs of the stool.
“It’s not that it can’t support it,” she explained. “It’s just that the burden on those two are more than it would be if there was a state income tax.”
However, Rodrigue clarified that she was not advocating for a state income tax. Because while Texas has among the highest property taxes in the nation, it also has one of the lowest taxes overall.
According to the Tax Foundation, the average total tax per person in the United States was $4,420. Texas’ was $3,340 in the same year, making it the 46th lowest in overall taxes in the nation.
“Most people don’t understand that,” Rodrigue remarked. “They look at their bottom line.”
HOW ARE VALUES ESTIMATED?
Rodrigue explained that there are two components to your tax bill — the taxable value and the tax rate. The appraisal district is responsible for the taxable value, and the taxing units are accountable for the tax rates.
The law requires that appraisal districts appraise property at 100 percent of its market value, fairly and equally. And there are three different values – market value, appraised value and taxable value.
Rodrigue explained that a property’s market value is a direct reflection of what is going on in the market. Rodrigue said appraisers are also legally required to appraise properties fairly and equally.
So if two properties are equal in quality, characteristics and condition, their appraised values should be similar as well.
“We follow the market,” she stated. “As the market goes up, we have to go up. If it comes down, we have to come down. We’re following and reflecting the market.”
The appraisal district also follows the law on special valuations like the appraisal cap. If a property owner has a homestead exemption, a cap gets put into effect for the following year.
Rodrigue stated that if a person’s home has a homestead exemption, their appraised value could not legally go up more than 10 percent over the previous year’s appraised value. Market value will continue to fluctuate with the market so you could have a market value that is higher than your appraised value.
“The capped value is purely a calculation,” Rodrigue stated. “The only thing that would make it higher is if they added square footage or amenities to the property; if they added something new on the property.”
Many times the market value and the appraised value are the same, but because of things like the appraisal cap and agricultural special valuation, it is possible for the appraised value to be lower than the market value.
The taxable value, meanwhile, is the appraised value less any exemptions the owner may be eligible to receive.
Once the appraisal district mails appraisal notices, receives protests from property owners and the Appraisal Review Board has heard all complaints, they approve the appraisal records. The chief appraiser then certifies to each taxing unit, the taxable values of all properties within their respective units.
HOW ARE TAX RATES SET?
Rodrigue stressed that the appraisal district does not set tax rates. The tax rate is the responsibility of each taxing unit. Ellis County, 11 school districts, 20 cities and 10 special taxing districts make up the 42 taxing units in Ellis County.
“Local taxing units must rely in large part on the property tax to fund the services they provide,” Rodrigue explained. “Each governing body must look at their budget and see what tax rate they need to adopt in order to fund their budget.”
Once the chief appraiser certifies values, the taxing unit has tax rates calculated. Then each governing body proposes a tax rate, hearings are held and each taxing unit adopts their respective rates.
Rodrigue clarified that voters approved some of the expenditures that go into those rates during bond elections hosted in their respective districts.
“Some of this is voter-approved with voters saying ‘Yeah, we’re good with what you need to fund,’” Rodrigue remarked.
Once taxing units go through the rate adoption process, they then notify the tax collector and tax bills are calculated using the certified value provided by the appraisal district and the tax rate adopted by each taxing unit. The tax is calculated by dividing the certified taxable value by 100 and multiplying the result by the adopted tax rate of each taxing unit.
WHY ARE PROPERTY TAXES GOING UP?
According to the Ellis Appraisal District Annual Report, the market value has gone up every year since 2011. Rodrigue attributed the increase to the county’s population growth, as Ellis County has seen an increase in over 20,000 residents since 2011.
“The economy is driving this growth,” Rodrigue stated. “Ellis County is a great place to live and work and people are moving into this area. As you have more people coming into the area, there’s more demand. Demand drives prices up.”
Rodrigue explained that if values go up and tax rates do not come down, taxes are going to continue to increase, adding more of a burden to the property owners.
“In five years on the backs of our property owners, property taxes have gone from $252 million to $341,” she expressed. “Is there any wonder why property owners are screaming?”
To read the Ellis Appraisal District's 2018 Annual Report, visit www.elliscad.com.