Tax rates likely to decrease in Dallas County, but commissioners are split on how far to go
Dallas County officials are expected to decrease the property tax rate for the next fiscal year, but it’s unclear how much.
That does not mean, however, that people will pay less for county services. Property taxes, whether paid directly by home and business owners or indirectly through rent, are expected to increase this year for many Dallas County residents.
That’s due to the surge in the appraised value of properties as more and more people move to the area.
“We have never seen a real estate market like this,” Ken Nolan, the head of the Dallas Central Appraisal District, told commissioners in May.
The current property tax rate for the county is 22.79 cents per $100 of assessed valuation, a ten year low. At a recent presentation, staff in the county’s budget office presented four possible rates for fiscal year 2023.
All the rates presented are lower than the current rate. Each is per $100 of assessed valuation:
- 19.768 cents. Budget director Ronica Watkins-Babers called this the “No-New Revenue” rate and said it would lead to a $29.5 million shortfall for maintenance and operations costs. That could lead to reductions in what the county could do. She said this rate would not cover new programs or unfunded mandates.
- 20.648 cents, called a “break even” scenario. Watkins-Babers said this would keep maintenance and operations costs the same but not cover unfunded mandates from the state or allow new programs or projects. Any unexpected expenses would have to come from the county’s reserves.
- 21.3879 cents, the “Voter-Approval Rate.” According to Watkins-Babers, the county would be able to pay for unfunded mandates and spend on priorities like infrastructure for electric vehicles, and an increased security contract for county buildings.
- 21.7946 cents, a reduction of 1 cent from the current rate. This rate would replenish County reserves and put money toward IT capital projects. This was the rate county staff used in its proposed budget.
By the end of the presentation, commissioners had not found a consensus, even though most expressed concern about having enough money to retain employees with pay increases and support an increasing jail population.
"I don’t think it is clear where three votes are,” said County Judge Clay Jenkins. Three votes constitute a majority of the commissioners court.
Two commissioners, District 3’s John Wiley Price and District 4’s Elba Garcia, clearly stated they wanted the one cent reduction rate.
"I’m there,” said Price.
District 2 Commissioner J. J. Koch, however, wanted a much deeper rate cut. But he also said, “I understand that we’re not going to be able to do ‘no new revenue’ rate.”
Koch wanted staff to look at how many projects could happen with funding already in escrow accounts or money from the American Rescue Plan, which sent millions to the county for coronavirus-related expenses.
“Using the money that’s at hand, particularly when we have the opportunity to give a larger tax break to folks in what is a difficult time, does seem fiscally prudent,” Koch said.
Watkins-Babers said some of the money in escrow may be needed for un-budgeted IT projects. And Garcia pointed out that the federal government continues to put restrictions on ARP funds.
“Tell us how many times the federal government has changed the rules that we still haven’t been able to deliver a lot of the money for small businesses, minority diversion, and non-profits,” she said.
Finally, Jenkins instructed the budget staff to calculate another potential tax rate below the “voter approval rate,” one that incorporated any usable escrow and ARP money into the budget.
“I definitely want to do all the due diligence on that,” Koch said.
The county isn’t the only entity that levies taxes on property owners. Others include city governments, school districts, Parkland Hospital, and the Dallas Community College District.
County commissioners are expected to adopt a tax rate in September ahead of passing a budget before the new fiscal year starts October 1.
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