Data & Analysis

A recent history of property taxes in Texas

By Tim Brown

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The Texas Comptroller of Public Accounts publishes a report on local property taxes across the state every other year. One of the tables in the appendices shows a history of the levies going back more than two decades. The levies, by type of local government, reveal a lot about the state, and the changes can seem jaw-dropping at first. For example, total property tax levies increased by an average of 5.9% per year from 1998 to 2019, the last year of data in the report.

Chart 1 shows the total amount of property tax levied by each type of local government in the state. As the chart shows, school property taxes make up the majority of those levies, starting at more than $11.3 billion in 1998 and increasing to just under $36.3 billion in 2019.

The 219.79% increase is large in numerical value but relatively limited at an average annual increase of 5.43%. This is below the average increase in total property tax levies of 5.9% for the same period as seen in the following table for the period 1998-2019. However, when the period is limited to 2007-2019, the growth of school levies shows less restraint, with an average annual increase of 5.64%, ranking just behind special districts (such as hospital districts, junior college districts and various water districts) as the fastest growing segment of the property taxing community – faster than either cities or counties.

For comparison, the U.S. Bureau of Labor Statistics shows a 26.95% total increase in the consumer price index (CPI) from January 2007 to December 2021. And U.S. Census Bureau population estimates for Texas show a 21.67% total increase from July 1, 2007, to July 1, 2019.

While the growth in special district levies, at 96.92% from 2007-2019, raises some questions, the growth in school district levies is the real surprise. School district property taxes were cut in 2006, and the state began providing additional funding for schools. This created the dip in school district levies in 2007, but then school districts increased their property tax levies by 12.5% in 2008 and averaged a 5.43% annual increase through 2019. Schools did not consistently raise tax levies. In 2010 their levies decreased 1.02% as seen by the slight dip on the chart. This decrease came between a 2.57% increase in 2009 and a 2.06% increase in 2011.

Conversely, special district levies fell three times over this period. The largest of these drops was from 2010 to 2011 when the levy fell 8.65%. The two other decreases were of 0.25% and 0.26% respectively in 2013 and 2017. However, special district levies also increased by more than 10% in three years: 2012, 2014 and 2016. As a result, special district levies experienced the largest overall increase of 96.92% over the entire 2007-2019 period.

More recent property tax data, not included in the 2020 report, shows special district levies decreased 8.09% from 2019 to 2020 before increasing 4.26% in 2021 as seen in the second table. Increases in county levies were consistently between 3% and 4%, though they did not have the lowest increase each year.

Interestingly, while the number of counties has remained constant, the number of special districts went from 2,091 in 2017 to 2,112 in 2019 before hitting 2,310 in 2021, according to the Comptroller's data on special districts that collect property taxes (some special districts do not collect property taxes but have other sources of revenue and are therefore not included in this discussion). Since the Comptroller's Office presents the data by county, each district that reaches into multiple counties gets counted once for each county in which it collects those taxes. The San Antonio River Authority, for example, collects a property tax levy in Bexar, Goliad, Karnes and Wilson counties and therefore accounts for four of the special districts in each of the three tax years discussed.

Thus, if a multiple county district expands to collect property taxes in a new county, then it gets counted an additional time beginning in that tax year. This increases the count of special districts just as the creation of a new taxing special district increases the count.

Different periods have seen different types of entities with greater increases or decreases in their property tax levies. Most recently, since the pandemic started, counties have seen small yet consistent annual growth in the levies. Other types of entities, such as special purpose districts, have seen wider swings in their levies, with both greater increases and greater decreases. As conditions change across the state, so too will levies rise and fall to meet the changing economic and political environments.

Note: The Texas Comptroller of Public Accounts published the biennial report in December 2020, which means the next version is not due until the end of this year. More recent data for both 2020 and 2021 is available on the agency's website. However, the online data may be subject to change before it is included in the next version of the report later this year.