Property Appraisal Reform

December 2022

Christmastime truly is the most wonderful time of the year, and I hope you are all enjoying a blessed season with family and loved ones. Your House District 16 office has been hard at work preparing for the upcoming 88th legislative session, ensuring our legislative package all wrapped up and ready for the 140 day sprint that convenes on January 10th. It is hard to believe we have already arrived at another session year here in Texas, and our office has been working diligently for many months crafting meaningful legislation that will improve the lives of those who live in district 16 and Texas. Crafting our bill package takes time to ensure we have done our research and engaged stakeholders on a wide variety of important policy issues. However, there always seems to be one policy issue that remains at the forefront and requires policy adjustments each session as the landscape of our great state continues to change with the influx of new citizens from other states. That issue is skyrocketing appraisals and property tax bills. 

As you may recall, the legislature has spent quite a bit of time working on the property tax rate reform side of this equation over the last several sessions. Most recently, two important pieces of legislation passed the legislature during the special legislative sessions of  Fall 2021 and were subsequently approved in a constitutional amendment election by the voters in May 2022. During the second called special legislative session last year, I joint-sponsored legislation to benefit individuals with an over 65 or disabled exemption on their homesteads so that they receive a reduction on their school district property taxes. During the 86th Legislature in 2019, I co-authored House Bill 3 which compressed school district maintenance and operation tax rates across the board, except those over 65 or disabled because they already had a rate lower than the newly compressed rate. The newly approved Proposition 1 from May’s election will provide the same percentage reduction for the 1.8 million over 65 exemptions and the 180,000 disabled exemptions. If there is additional school M&O tax rate compression provided by HB 3 in the future, individuals with an over 65 or disabled exemption will receive the same percentage tax rate deduction automatically if this amendment passes.       

I also co-sponsored Proposition 2 during the third called special legislative session last year to increase the current homestead exemption by $15,000. Thanks to you the voters passing Proposition 2 in May, the state homestead exemption for school district taxable value purposes increased from $25,000 to $40,000. Notably, this exemption increase will be a permanent ongoing benefit to all with a homestead exemption.    

As I mentioned previously, in 2019 the legislature championed massive property tax reforms under HB 3 and SB 2, both bills I was proud to co-author and co-sponsor. The Texas Taxpayers and Research Association estimates these reforms shaved upwards of $6 billion off 2021 property tax bills, and tax rates continue to fall and levies are growing at their slowest pace in years. Both HB 3 and SB 2 constrained the ability of taxing units to raise property taxes above a certain amount before voters must approve. Without the reforms made in HB 3, tax rates would have continued to rise much higher and more quickly than before these changes were implemented. SB 2 resulted in city, county and special district tax rates limiting their levy growth. With the passage of Propositions 1 and 2 on the May ballot, Texans will see even more savings on their property tax bills moving forward. 

However, the policies we have addressed in recent sessions above only address one side of the property tax bill equation by targeting reform in the taxing entities rate setting process. The other side of the equation are skyrocketing property valuations assessed by central appraisal districts which are then used by local taxing entities to set local property tax rates. The state does not collect a property tax, nor does it collect local dollars from your property taxes as revenues to fund the state budget. The state budget is funded by different sources, such as sales tax (the largest revenue stream), rental tax, oil and gas tax, just to name a few. Local governments and taxing entities are funded by your local property tax dollars, and you can see on your tax bill each fall the breakdown of exactly what taxing entity gets what amount and the rate they charge. The problem we are seeing with massive appraisal increases driven by market demand. These rising appraisals have remained a crushing burden on home and business owners. Please know as your state representative I have fought every session that I have been in the legislature to reign in appraisal districts. 

During the most recent legislative session I authored, and passed out of the House, House Bill 3322 which would make the appraisal review board in Montgomery County an elected position. Unfortunately, this bill did not make it to the finish line. I have also filed legislation that will lower appraisal caps to 5% for homesteads and 10% for commercial properties. Currently, the homestead cap is at 10% and is there is no cap on commercial property. As a fellow property owner in our community, I fully understand the burden of property taxes and will continue to do my part as a legislator to address this problem at the state level. Please know I will continue to fight to reform the appraisal system in this state, and that’s exactly what I intend to do heading into the upcoming session with House Bill 808, House Bill 809, and House Bill 810.

House Bills 808, 809, and 810 will bring much needed accountability and transparency to the appraisal process. House Bill 808 would make the chief appraiser an elected position. House Bill 809 would make the appraisal district board of directors elected positions, and House Bill 810 would make the appraisal review board an elected position for each central appraisal district. As elected officials, we are accountable to the voters by the decisions we make. The county appraisal system should be accountable and responsive to their communities as well. I intend to file more legislation to address the appraisal side of the equation, but rest assured property tax reform and relief remain a top priority of mine. 

Again, I hope you all have a Merry Christmas and a healthy, happy and blessed New Year in 2023! May God bless you, your family, and the great State of Texas!

Will Metcalf
State Representative
House District 16