Officials in three Smith County school districts want voters to answer the million-dollar question or more accurately, questions worth millions of dollars.
Their answers to bond proposals on the May 7 ballot determine whether schools in Bullard, Chapel Hill and Tyler can use bonds to fund a variety of construction projects.
In addition, Texas voters will have an opportunity to approve something that hasn’t been offered since 2015: A tax relief measure in school districts.
For taxpayers, determining the need for these projects may be easier than figuring out the bottom line: How will approving these bonds and relief measures affect a property owner’s total tax bill?
The answer depends upon a tangle of contributing factors — assessed property values, tax rates, tax exemptions — that could leave some voting taxpayers confused.
County tax officials recommend voters educate themselves about the proposals, the tax assessment process and the potential impact to their own personal tax bill before heading to the polls.
First, the issues.
Texas voters can decide two tax-related issues on the May 7 ballot, both involving taxes assessed by school districts.
Proposition 1 calls for amending the state constitution and authorizing legislators to reduce the property tax limit for school maintenance and operations taxes imposed on the homesteads of elderly and disabled homeowners. If approved, that limit or “ceiling” would reflect any tax rate reduction enacted by law from the previous tax year.
In 2019, House Bill 3 compressed the maintenance and operations tax rate but did not apply it to homesteads of the elderly or disabled.
Smith County Tax Assessor/Collector Gary Barber said a tax ceiling is often referred to inaccurately as a “freeze.” A ceiling, he explained, prevents certain taxes from exceeding a set amount but does allow it to go lower. Taxpayers can be confused if the tax rate decreased in previous years but increased in subsequent years, not exceeding the ceiling limit.
“So, if the property value goes up (taxpayers) could see their taxes remain the same or go lower,” he said. “But if the value remains the same, taxes could decrease,” Barber said.
Proposition 2 calls for increasing the Residential Homestead Exemption. Texas entities offer a handful of exemptions that basically protect part of a homeowner’s property value from being taxed. The exemptions include those for military veterans, disabled persons, homeowners over 65 and for those homes that serve as a primary residence.
When legislators created the exemption, they set the figure at $5,000. In 1997, that figure was increased to $15,000 and to $25,000 in 2015.
If Proposition 2 is approved, homeowners who have filed for this exemption can subtract $40,000 from the assessed value of their home before the tax rate for a school district is applied.
For example: A home with an appraised value of $200,000 would be taxed by a school district based on the value of $160,000 instead.
“I would be very surprised if that (Proposition 2) fails because I’ve never seen a vote where people can lower their property taxes like that and didn’t [pass],” said Barber. “I think it will be a landslide victory.”
Proposition 2 takes effect the tax year beginning on or after Jan. 1, 2022 if approved.
State Sen. Paul Bettencourt R-Houston proposed allowing taxpayers to vote on the exemption increase, which the legislative budget board estimates will cost the state about $355 million in fiscal year 2023.
“People see the need for property tax relief, and Texans are going to cry out of that continuously,” Bettencourt said on the Senate floor. “This is a great way to bring that home to all of the taxpayers of Texas.”
To claim a homestead exemption, a homeowner must apply with the Smith County Appraisal District for a home that is their primary residence.
Bond proposal summaries
Bullard ISD (partially located in Smith County)
Voters face two separate bond proposals on the ballot:
· $82 million to construct a new middle school, building an addition to the primary and elementary school, renovating the high school kitchen and cafeteria and renovating the existing middle school.
· $21 million to construct/renovate tennis courts, baseball and softball fields and build a multipurpose facility.
Voters can select yes or no for each proposal.
The district’s current tax rate is $1.356300, and the average home in the district is $247,026 according to appraisal records. Approving the bonds would increase the school’s tax rate, costing property owners about $5.98 more a month (based on a $100,000 home) according to school officials.
Chapel Hill ISD
Voters also face two separate bond proposals on the ballot:
· $113,060,000 to construct a new junior high campus, build a new career and technology education facility, build a new transportation and operations facility, construct a multipurpose activity center and fund other facility improvements.
· $12,180,000 to construct an indoor facility for athletics and extracurricular activities.
Voters can select yes or no for each proposal.
The district’s current tax rate is $1.099 and the average value of a home in the district is $183,665 according to appraisal records. If approved, the district expects the tax rate to increase by a maximum of 34.82 cents. That equates to about $16.04 more a month for a home valued at $100,000.
Voters will decide whether to approve $89 million in bonds to fund construction of a new Hubbard Middle School and Early College High School.
Superintendent Marti Crawford said approving the bond will not increase the current debt tax rate of $0.335. The district’s current overall tax rate is $1.289100 and the average value of a home in the district is $196,848, according to appraisal records.
The bond proposal is being opposed by an Early College High School graduate who circulated a petition asking fellow students and members of the Tyler community to vote no.
Protest organizer Brayan Hernandez said the plan to move the ECHS campus from its current location on West Shaw Street to an area next to the district’s Career & Technology Center on Earl Campbell Parkway will “negatively affect” the program.
He contends the proposed location is smaller, has less parking and requires students to share their cafeteria and classrooms with CTC students.
Hernandez also said the school will lose a gymnasium and outdoor field which ECHS students utilize for academic assemblies, events, clubs and fundraising sporting events.
He supports rebuilding or remodeling the current ECHS campus.
Understanding the process
Determining a tax bill for property owners is a process that requires the cooperative efforts of three main entities:
- Taxing districts which propose a tax rate to fund their budget.
- The appraisal district that determines the value of the property being taxed, applying the exemptions and maintaining property ownership records.
- The tax assessor/collector who calculates and sends out the tax bill, collects the taxes and then distributes the money to the entities.
Both Barber and Carol Dixon, the chief appraiser for the Smith County Appraisal District, said they are accustomed to citizens confusing the duties of their office with the other.
“We get a lot of people here wanting to talk about their taxes,” Dixon said.
As for Barber: “Most of the time they have questions about where their values come from.”
Dixon and Barber said they are happy to answer questions in hopes of relieving any confusion.
So, just how do Dixon and her staff determine a property’s value?
“It is not just pulling values,” Dixon said. “We are actually working under the Texas Property Tax Code.”
The district operates under a mass appraisal system, which means appraisers are not going house to house conducting assessments but looking at the market as a whole.
“We are looking at market trends, analysis, market sales and things like that,” Dixon explained.
Every two years the state comptroller’s office conducts a property value study checking the assessed values in Smith County.
“They are making sure that we are appraising properties as the tax code has mandated that we do … at the 100% market value,” she said. “So, when you are in a hot market like we have been, then we are called to follow that market in our values and how we are appraising property. Residential values have increased … many times they are selling at or above the listing price.”
Currently, the appraisal district is in the process of mailing out thousands of appraisal notices to property owners. In Smith County, the total value of single-family homes totals a little more than $14 billion in market value, she said.
After receiving the assessment, a property owner has 30 days to protest the value — issues that are often resolved in an informal review process.
“The protest period allows taxpayers to come in and talk to us specifically about issues that apply to their property or in their area,” Dixon explained. “We’re seeing more property owners … learning how to use the website, looking at other comparable properties, so they actually come in very knowledgeable about what’s going on in their area, which is helpful.”
Barber is used to people knowing who he is, afterall. When property owners pay their taxes, his name is on the check.
His office takes the valuations of property in each district — school, city, county etc. — and calculates individual tax bills.
That calculation involves taking the property’s final assessed value and then multiplying it by the tax rate per $100 valuation.
It may seem like a simple calculation until different elements are factored into the equation. Increasing the homestead exemption could reduce a tax bill if the property value and tax rate remain the same. However, property values and some tax rates are generally expected to increase, which may or may not be offset by an increase in the homestead exemption.
Property owners likely will have to wait until later this year to learn their final tax bill based on the election results, the final tax rate adopted by a school district and when tax exemptions are applied.
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