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Travis County sets the stage for budget discussions in August, proposes 3.6% property tax hike

Thursday, July 30, 2020 by Jessi Devenyns

After an unprecedented year that has required Travis County staff to rework the county’s 2021 financial picture, the Commissioners Court opened public discussions about the upcoming 2021 budget on July 28.

Despite predictions earlier this year of catastrophic budget shortfalls, the county will not implement an 8 percent increase in tax rate. Instead, staffers are proposing increasing the property tax rate 3.6 percent over the current rate. This figure will translate to 37.4359 cents per every $100 of a property’s valuation. Should the Commissioners Court adopt this tax rate, staff from the Planning and Budget Office are anticipating a $29.93 million increase in revenue for the county over last year’s totals. The average annual tax bill increase for households will be $47.

In order to adopt this tax rate, it must first be presented to Travis County residents in a public forum. On Tuesday, the commissioners set the public hearing for the proposed tax rate for Sept. 15, with a final vote for adoption scheduled for Sept. 22. As the property tax rate is part of the county’s overall budget, there will also be a public hearing on the preliminary budget on Aug. 18.

The county is anticipating increasing its budget by 5.39 percent from 2020 to bring the total for all its funds to $1.28 billion. According to charts in the budget documentation, taxes will constitute 59.13 percent of the county’s total revenue.

Travis Gatlin, the county’s budget director, told commissioners that the Planning and Budget Office was “mindful of keeping the tax rate balanced” as they designed it for the upcoming fiscal year. This tax rate hike is much less than the 8 percent threshold the county may meet.

By raising the rates 3.6 percent above current levels, the county will be exceeding the 3.5 percent cap that the Texas Legislature enacted last summer. Proposing a higher tax rate is, however, in line with more current measures passed by Gov. Greg Abbott that allow local governments in the year of a disaster to designate the property tax rate increase up to 8 percent. The 8 percent cap will be an option across Texas for at least two years due to the local, state and federal disaster declarations that were announced in relation to the pandemic.

With the new rates set to fund a $1.28 billion budget, the county also expects to increase its reserve dollars by $57.38 million.

Travis County has continually increased its property tax revenues since 2012, thanks to significant appreciation and new construction throughout the county. According to Travis Central Appraisal District data, the total assessed value for all Travis County property is $214 billion. Of this total, Gatlin told commissioners that $5 billion is attributable to new construction, which represents 4.23 percent growth in the industry since last year. Home value appreciation has gone up 1.77 percent and amounts to $3 billion of the county’s total taxable property values.

The 120-page preliminary budget document can be found on Travis County’s website, and public hearings will begin next month.

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