In Austin, like many places in Texas, property tax increases are an annual occurrence. That is one reason state leaders often express frustration over the property tax burden and propose a variety of tax relief efforts.
A Tax Rate Election (TRE) happens when local governments rely on large property tax increases to pay for their budget. More specifically, when they raise property tax revenues by more than 3.5%.
That growth rate used to be 8% per year. In 2019, the Legislature lowered the threshold to 3.5% to protect taxpayers from excessive budget growth. The goal was to slow local spending, prevent individual tax bills from ballooning, and give voters a voice in their local taxation. Increasing revenues by 8% every year meant property tax collections could double every nine years without any voter input.
Will a Tax Rate Election Happen Every Year?
It depends on which local government you’re referring to.
It depends on the budget those local elected officials adopt.
For example, this is a comparison of the 2016 and 2024 property tax bills for an actual property in the City of Austin. This home paid property taxes to the City of Austin, Travis County, Travis Central Health, Austin ISD, and the Austin Community College District. Three of those jurisdictions (the city, county, and ISD) are subject to the 3.5% limitation.
While it’s unlikely the City of Austin will seek a TRE again next year, either of the other taxing jurisdictions could.
To illustrate, here is some background on Austin’s TRE history since the legislature implemented the 3.5% limitation.
2024 – Travis County won voter approval of a TRE for child-care programming, adding $126/year to the average homeowner’s county property tax bill
2024 – AISD voters approved a TRE for staff raises and other operational costs, adding $412/year in AISD property taxes for the average homeowner
These increases came in addition to bond proposals. In 2022, AISD and ACC proposed bonds totaling almost $3.6 billion. Austin’s $350 affordable housing bond from 2022 is expected to be followed by a nearly $700 million bond package in 2026.
Rather than asking whether Austinites will see a TRE every year, perhaps the more relevant question is: how many years between hundred-million-dollar tax increases are enough to keep Austin affordable?
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