Tarrant County Commissioners Court approved two new homestead exemptions on June 6. The first exemption is for a 10% exemption on the county tax rate. The second exemption is also a 10% exemption for the Tarrant County hospital district tax.

The details

According to the Texas Comptroller of Public Accounts website, homestead exemptions remove part of a home's value from taxation, thereby lowering the taxes on that property. Under the Texas tax code, counties must take the following rules into consideration before approving an exemption:

• The exemption may be up to 20% of a home's value.
• No matter what the percentage is, the amount of an optional exemption cannot be less than $5,000.
• Each taxing unit decides if it will offer the exemption and at what percentage. This percentage exemption is added to any other home exemption for which an owner qualifies.
• The taxing unit must decide before July 1 of the tax year to offer an exemption.

The 10% county tax rate exemption, which was approved unanimously, translates to an average savings of $34 in the property taxes homeowners will pay. County Administrator G.K. Maenius estimated the exemption will cost the county between $28 million-$30 million.

Quote of note

“Keep in mind, [$34] is a small number now, but with what appraisals have done and considering the same appreciation we’ve had in the past several years, it ends up being in the several hundred dollars 10 years down the road,” County Judge Tim O’Hare said. “Right now it looks small, but every dime helps.”

Sorting out details

The second tax exemption for the Tarrant County hospital district proved to be a more debatable issue, considering it passed with a 3-2 vote.

O’Hare, along with commissioners Manny Ramirez and Gary Fickes, approved the 10% hospital district tax exemption due to the fact that JPS Health Network—the name the hospital district goes by—has exceeded their revenue goals over the past several years.

O'Hare pointed out that in fiscal years 2020-21 and 2021-22, actual revenues over expenses were $327 million and $112.3 million, respectively. The budgeted revenue over expenses for FY 2022-23 is $78 million.

"At the end of the day we have to be financially and fiscally prudent," O'Hare said. "We owe it to our taxpayers to provide some relief."

Along with Commissioner Alisa Simmons, Commissioner Roy Charles Brooks voted to deny the hospital district exemption in large part because of the $800 million bond package that is underway.

"We are in the middle of an expansion," Brooks said. "To facilitate the expansion, the hospital district would provide an additional $400 million from its operations. If they are unable to do that, it will impact the ability to build out the capital program envisioned by the bond issue, [and] it will affect the bond rating, which will make future borrowings more expensive."

Brooks went on to say that the court did not know what a homestead exemption is going to do to hospital district revenues, and the commissioners have not been presented with information about how it would impact the hospital district.

"We don't know; we're guessing," he said. "And I would say that now is not the time to guess."