Tarrant County Commissioners voted Tuesday to offer more property tax relief for homeowners, but some questions remain how that vote will affect the county’s publicly funded hospital, John Peter Smith (JPS).
Commissioners voted unanimously Tuesday to increase two homestead exemptions from 10% to 20%, the maximum allowed by law. The exemptions apply to the county’s general property tax fund and the property taxes that fund JPS.
What is a homestead exemption?
Homestead exemptions work by subtracting a certain percentage from a home’s taxable value. That means with a 20% homestead exemption, if you own a home appraised at $400,000, you’d get taxed as if you owned a $320,000 home.
Before the vote, Democratic County Commissioner Alisa Simmons asked if JPS will be able to fulfill all the obligations of its bond program under the new exemption.
The bond, which voters approved in 2018, laid out an ambitious expansion and improvement plan for the hospital. JPS expects total costs for the project to hit about $1.5 billion.
JPS Interim Chief Financial Officer Rory McCrady said the hospital could complete the bond projects.
“I think at the current state, we are confident that those projects would continue,” he said.
JPS is looking at budget adjustments and cost-cutting to make sure the bond projects get done, McCrady said.
Other commissioners, including Republicans Manny Ramirez and County Judge Tim O’Hare, said they had reassurances from JPS President and CEO Dr. Karen Duncan the hospital could handle the new homestead exemption.
“They’re absolutely excited to help us get to the tax rate that we need to get to,” Ramirez said.
O’Hare said as of April, JPS had $143 million in excess revenue. Democratic County Commissioner Roy Brooks cautioned him that excess could disappear with any expenses that come later down the line.
Still, Brooks supported the JPS homestead exemption increase as well, also citing a conversation with Duncan.
“I’m good with it because she’s good with it,” he said.
The JPS homestead exemption increase passed 4-1, with Simmons voting against it.
KERA reached out to JPS for comment the day before the vote, asking how the exemption could affect JPS’ budget.
“After speaking with the team, JPS does not have a comment at this time,” spokesperson Jessica Virnoche wrote in an email.
KERA reached out again after the vote, asking how much money the hospital anticipates losing and whether the loss would affect any programs or cause cuts. Virnoche declined to comment.
The total anticipated savings for homeowners from the JPS homestead exemption increase is $26 to $28 million, according to county documents.
The same goes for Tarrant County, which will also lose out on $26 million to $28 million in revenue under the 20% homestead exemption. The upcoming county budget process “will address the adjustment to revenue,” county spokesperson Bill Hanna said in a text message.
With both homestead exemption increases passed Tuesday, the owner of a $350,000 home would see a reduction of $136.15 in their tax bill, according to a county press release.
The bigger homestead exemptions come as a direct response to the rise in housing prices in Tarrant County over the last decade and "the public outcry over continually rising property taxes in Texas," O'Hare said in a written statement after Tuesday's meeting.
“By increasing the Homestead Exemptions to the maximum allowed by state law, we are ensuring that homeowners will keep more of their hard-earned money," O'Hare said. "Setting both Homestead Exemptions at 20% for the first time in Tarrant County is not only historic, but also responsible government.”
Texans pay some of the highest property taxes in the country, but the county’s property taxes are a small proportion of what homeowners pay. These changes to the county homestead exemptions do not affect other, bigger taxing entities like school districts.
This story has been updated with comments from County Judge Tim O'Hare and JPS.
Got a tip? Email Miranda Suarez at msuarez@kera.org. You can follow Miranda on Twitter @MirandaRSuarez.
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