Rising property tax values across the state, including in Montgomery County, over the past few years are putting a strain on home and business owners. The issue has prompted local leaders in Texas government to explore ways to alleviate the growing burden.


Between 2005 and 2014, Montgomery County property tax levies increased by 119 percent, according to the Texas Comptroller of Public Accounts. During that same time frame, median household incomes only increased 15.5 percent, according to the U.S. Census Bureau.


“The real estate market in Montgomery County has been very good. Most of it is a direct relation of supply and demand,” said Tony Belinoski, deputy chief appraiser for Montgomery Central Appraisal District. “We have a lot of people moving in every year, as evident by all the new construction that is occurring.”


Over the past two years, the cities of Conroe, Montgomery and Willis have seen their average property value appraisals rise by 26 percent, 34 percent and 39 percent, respectively, according to MCAD. Local lawmakers say the rate of increase is unsustainable.


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


Bettencourt chairs the Property Tax Committee established by Lt. Gov. Dan Patrick that has been tasked with finding ways to alleviate the property tax burden in the 2017 legislative session.


Mo.Co. property appraisals continue to rise


Legislative solutions


Greater Houston area property owners gathered Sept. 29 at a public hearing in Houston with Texas state senators to discuss property tax relief solutions.


State Sen. Brandon Creighton, R-Conroe, said rising taxes and appraisals are especially significant in Montgomery County. He said the public hearings being held this summer were meant to find a solution.


“This interim, the lieutenant governor established a select committee on property tax reform and appointed me to that committee along with Chairman Paul Bettencourt,” Creighton said. “We have been traveling around the state in public hearings to get testimony from taxpayers, businesses and local governments.”


Average appraised values for a home in Montgomery County has increased by 18 percent since 2014, according to MCAD. To Bettencourt and other reform advocates, the problem can be summarized by how much faster assessed values have risen compared to median household income.


“What we’re seeing is a constant pattern of property taxes [levied] increasing 2.5 to three times faster than Texans’ paychecks,” Bettencourt said. “For homes below the statewide median average, those budgets are very stretched to begin with. That’s health care money, education money.”


Bettencourt said there are several solutions being considered by the legislature to address the concern.


“One of the solutions is simple: it’s called rollback,” Bettencourt said. “As the values go up, tax rates are forced to go down. In addition, we’re going to be looking at appraisal reform from the standpoint of appraisal district practices. These solutions are designed to stop runaway tax bills.”


Property tax reform and relief is expected to remain a hot topic in Houston as state and county officials work toward new legislation after hearing concerns from residents. However, Creighton said passing new regulations in the state Legislature is a challenge because not every municipality in the state is experiencing economic growth.


“[Municipalities] and school districts have a lot of influence in the Legislature to allow the current appraisal process to provide new revenue as property values are increased because that provides more revenue to areas of Texas that are stagnant or digressing,” Creighton said.


Mo.Co. property appraisals continue to riseLocal initiatives


Local officials said the economic growth that the county has experienced has been a positive, but the tax increases to residents needs to be addressed.


“It’s a double-edged sword,” Montgomery County Judge Craig Doyal said. “The more economic growth we have, the more values would increase. We manage the cost portion as best we can.”


Even though property owners may not have an issue with the appraised values of their homes, Belinoski said most complaints stem from increasing tax bills. The MCAD received about 45,000 appraisal protests this year—the most the district has ever had—out of about 210,000 appraised properties.


“Tax bills are a big problem. That is the one big thing that we hear most of the time during the year: ‘Taxes are too high,’” Belinoski said.


Belinoski said property owners are paying more in taxes because local municipalities and school districts do not necessarily reduce tax rates when appraisals go up to accommodate the increasing property appraisals.


From fiscal year 2009-10 to FY 2015-16, the city of Conroe maintained the same 42 cents per $100 valuation tax rate. During that time frame, annual city revenue from property taxes grew from about $13.39 million to $20.24 million. Belinoski said the revenue increase includes property value increases, addition of new property through annexations and new construction.


Similarly, the city of Montgomery has maintained its tax rate of 41.55 cent per $100 valuation since 2011. However, the city expects about $691,303 in property tax revenue in 2016 compared to $407,917 in 2012.


To provide relief to local taxpayers, city of Conroe officials voted to reduce its tax rate to 41.75 cents for FY 2016-17. The reduction amounts to a savings of $5 for a $200,000 home in Conroe compared to last year.


Mo.Co. property appraisals continue to riseConroe Mayor Toby Powell said he would like to see more property tax cuts in addition to the one implemented this fiscal year, but also said the city was unable to cut more because of a decline in sales tax revenue.


“It is a falsehood when you say, ‘We have not raised our tax rate in 15 years,’ when your appraisals are going up by 13 percent or more every year,” Powell said. “I just think we could be more compassionate and more thoughtful about what we are doing up here in City Hall. It is time that someone started thinking about residents instead of thinking about our bottom line all the time.”


Doyal said county officials have also tried to drop the tax rate every year during the annual budget process. The county approved a 1 cent tax cut for FY 2016-17 in September. The reduction amounts to a savings of $20 for a $200,000 home in Montgomery County compared to last year.


“This is the fifth time we’ve dropped the tax rate—it’s generally only 16 percent of the average tax bill,” Doyal said. “People have been challenging appraisals for many years, but it has escalated. Values are going up, and there are a lot of new communities.”