Appraisal and Revenue Caps

1
Appraisal and Revenue Caps

• Effects on County Government

2
What is an Appraisal Cap?

• Limitation on the amount a propertys taxable
  value can rise each year
• Currently, the taxable value of a home before
  exemptions cannot rise by more than 10 per year
  regardless of market value
• Recent proposals would change this cap to 3, 5
  or a local option.

3
Appraisal Caps
Assumption The taxes are levied at the
effective tax rate and there is no new
property. AV - Assessed Value. TV - Taxable
Value.
4
Appraisal Cap Tax Shift
5
What is a Revenue Cap?

• Limit on the amount of additional tax revenue
  that can be raised.
• Currently counties have an 8 cap exceeding
  the cap can trigger a rollback election.
  Expensive!
• Recent proposals would change this cap to a
  population growth plus inflation factor, 3, or
  5.

6
Population Growth Inflation

• Why is the formula flawed?
• No existing measure of inflation (CPI, PPI)
  correctly captures the growth in the cost of the
  kinds of services county governments provide.
• Population growth does not reflect the growth in
  the subpopulations county governments serve.
• County government does not control the demand for
  services.
• Counties cannot adapt to state or federal
  mandates without flexibility to generate revenue.

7
Growth in Costs vs. Inflation and Population
8
Growth in Costs vs. Inflation and Population
9

10
Statewide Property Taxes 2005
Data Source Texas Comptroller of Public Accounts
11
Data Source Texas Comptroller of Public Accounts
12
(No Transcript)
13
(No Transcript)
14
3 Revenue Cap Revenue Loss 326,488 LOSS
OF SERVICES

• Commissioners Court must make a decision
• regarding a cut in services to cover the budget
• deficit. 326,488 is equivalent to the following
  budgets
• Historical commission
• Public library
• Child foster care
• Senior citizens services
• Healthcare unit
• Sheriff patrol
• Emergency management

15
Mandatory vs. Discretionary(Required vs.
Optional Services)

• Which of the following services that county
  government provides are mandatory?
• Community and Economic Development
• Emergency Medical Services
• Sheriffs Patrol
• None of the Above

16
Mandatory vs. Discretionary This side-by-side
comparison is an indicator of choices a county is
required to make with available revenue.

• Mandatory
• Jails
• Meals
• Medical Treatment
• Staff
• Facilities
• Access to Legal
• Transportation
• Equipment
• Commissary
• Training

• Discretionary
• Jails
• Quality and Quantity of Meals
• Level of Medical Care Dental Care
• Rehabilitation Programs
• Work Programs
• Victim/Witness Secure Telecommunications

17
Mandatory vs. DiscretionaryJudicial System

• Mandatory
• Courts-staff, equipment, facilities
• Indigent legal services
• Court Administration
• Clerks-record keeping
• Constable-service of process
• Sheriff-service of process
• Sheriff-juror bailiff duties
• CSCD-facilities and communication infrastructure
• Juvenile Probation

• Discretionary
• CSCD-level of rehabilitative programs
• Juvenile Probation-level of rehabilitative
  programs

18
Mandatory vs. DiscretionaryPublic Health and
Safety

• Mandatory
• Indigent Medical
• Indigent Burials
• Mental Health-jail
• Hospital (some circumstances)
• Sheriff-suppress crime and arrest offenders
• Homeland Security-various offices
• Victim Notification

• Discretionary
• Level of medical services
• Poverty level of citizens served
• Environmental/sanitation services
• Emergency Medical Services
• Level of enforcement
• Level of preparedness
• Fire Marshall

19
Mandatory vs. DiscretionaryCommunity Development
Other

• Mandatory
• Roads (current)
• Sheriff-estray
• Retirement (existing programs)
• Salary (minimum wage)
• Personnel/payroll recordkeeping
• Workers Compensation

• Discretionary
• Roads (new)
• Abatements
• Parks
• Library
• Event arenas
• Nuisance abatement
• Family services
• Elder services
• Retirement (new employees)
• Salary (position appropriate-market)
• Medical benefits

20
(No Transcript)
21
(No Transcript)
22
(No Transcript)
23
(No Transcript)
24
How do other states fund local government?

25
Colorado Co. Expenditures, 2002
26
California Co. Revenues, 1998
27
California Co. Expenditures, 1998
28
County InnovationImproving Efficiencies for
Service Delivery

• Yoakum County Hospital
• Harris County Criminal Collections
• Swisher County Networking
• Tarrant County Equipment Program

29
Conclusion

• Appraisal caps shift property tax burdens.
• Revenue caps affect counties ability to afford
  goods and services.
• Counties are limited in how they raise funds.
• Counties are not in control of the mandated
  duties handed down by the state and federal
  government.
• Caps impact the quality of life of citizens and
  employees.
• Caps affect the ability of local governments to
  provide abatements and support Economic
  Development.