The city of Pearland saw its biggest increase in property values—and property tax bills—in 10 years in 2016, straining the budgets of home and business owners. Pearland City Council approved a 2016 tax rate of 68.12 cents per $100 valuation at its Sept. 19 meeting . While the new rate is a 2-cent decrease over the 2015 rate, homeowners will still pay more taxes this year because of the exponential increase in appraisal value

The average cost of a single-family home in Pearland was $230,747 in 2016, a nearly 13 percent increase over last year.

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This marks a new upward trend in home values in the area. Prior to 2014, home values remained nearly unchanged for seven tax cycles, appreciating by only $2,000 during that whole period, according to property tax records from the Brazoria County Appraisal District. Since then, home values have skyrocketed from an average of $178,854 in 2013 to $230,747 in 2016, a nearly 30 percent increase over three years with the most exponential jump in 2016, according to the BCAD.

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“The market has just really gone up,” Brazoria County Chief Appraiser Cheryl Evans said. “I think it’s because of industry, and people are having to move into the area. There are more jobs.”

Residents in Pearland are looking to Texas lawmakers to examine legislative solutions for tax relief.

Lawmakers like Texas state Sen. Paul Bettencourt, R-Houston, say the continued increases are unsustainable and dangerous to Texans.

“This is not an anti-government crusade; it’s a crusade for reality,” Bettencourt said. “My taxpayers’ realistic ability to pay has to come into the equation.”

Bettencourt chairs the Senate Select Committee on Property Tax Reform and Relief, which will work on alleviating the property tax burden in the 2017 legislative session.

Local unrest

Residents vented their frustrations with the city's new property tax rate during a public hearing prior to City Council’s approval Sept. 19. If the city collected the same amount of revenue as 2015, this year’s rate would be 63.9 cents. 

The 2016 tax rate is above a threshold called the rollback tax rate, which means Pearland residents could petition the city for an election to reduce property tax rates to the rollback rate of 65.66 cents, according to the Texas Comptroller of Public Accounts.

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The rollback rate would still generate more revenue for the city over last year, according to the city’s tax rate notice.

The city plans to spend those extra dollars on sidewalks, roads, and future fleet replacements for law enforcement.

“The city is obviously in high growth mode, and we are building out the infrastructure, the roads, the park system to support that, and that gets financed with long-term borrowing, and that’s paid back by property taxes for the people who use that,” City Manager Clay Pearson said.

But not all residents are on board with the city’s spending. Vicky Smith, who lives near the Golfcrest Country Club, has been outspoken about the city’s finances and opposed the rate increase.

“We continue to invest in painting the face of Pearland by building new and bigger but not better,” Smith said during the Sept. 19 City Council meeting, “I have yet to hear council state how this large increase of the effective tax rate will be used to pull us out of the pond.”

Council member Trent Perez said he believes the city’s new tax rate is appropriate to its size and growth projections. He said the rates are necessary to provide a high level of service to residents.

“There are certain things the city is obligated to do,” Perez said. “Our rate is driven by revenue, and revenue is driven by expenditures.”

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Council member Tony Carbone was the sole dissenter to the 2016 tax rate. He said taxes should have been cut further.

“It’s such a complex issue because the other side of the argument is, ‘We reduced your tax rate. Look at us; we did the right thing,’” Carbone said. “We didn’t have to roll up our sleeves, get in the weeds and cut anything.”

Legislative priorities

Property tax reform will be on the table during the 2017 Texas legislative session. One proposed solution is a measure that causes tax rates to go down automatically as assessed values rise, Bettencourt said.

“Unless the public votes for something, you have to slow down the growth of government because the public just can’t afford it,” he said.