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It has been widely reported by the local media that Harris County Commissioners’ Court increased taxes by 8% at their meeting on September 19.
However, the County’s public tax notices clearly show that for the increase for the average homeowner will be at least 15% and may be as high as 19%. While this increase is jaw-dropping, it is made even more egregious because it comes on the heels of a nearly 12% increase last year, making the increase over the last two years 29.5%. These increases will result in the County and its related entities receiving nearly $900 million more in tax revenue than just two years ago. To say this increase is unprecedented is a gross understatement. I suspect this is the largest two-year tax increase in the history of the State of Texas.
The Tax Setting Process
First, it is important to remember that your tax bill is a function of two factors: the tax rate and the taxable appraised value of your property. If either of those goes up or down, so will your tax bill.
When elected officials set their tax rates in the fall of each year, the appraisal district has provided them with an estimate for the likely increase in the appraised values for that year.1 That estimated increase in the appraised value for the average taxpayer's home is included in the required tax notices. So, when elected officials set tax rates for the year, they know what the likely effect will be on their residents' tax bills.
Officials like to talk about tax rates but ignore appraised values, which for many years have been steadily moving higher. This allows elected officials to claim that they are holding taxes steady or, in this case, mislead taxpayers that an increase is not as dramatic as it actually is.
The 2024 Tax Increases
The Commissioners’ Court sets the tax rates for the Harris County along with the Harris County Flood Control District, the Harris County Hospital District and the Port Authority. Because these are separate legal entities, they must publish separate public notices regarding their tax rates.
So, let's look at happened at each of these entities in the tax setting process over the last two years.
In both of these tax years, the Harris County Appraisal District (HCAD) notified Commissioners' Court in advance of setting the tax rate, that appraised values would be increasing. The projected increase in 2023 was 9.3% and 4.48% in 2024. So, Commissioners knew that even if they did not increase the tax rate at all, property owners' tax bills would still go up by those amounts.
Here are the tax rates set by Commissioners' Court this year and the effect they had on the average homeowner according to the official public tax notices.
For the County, the Commissioners’ Court approved an increase in the tax rate of just over 10%. When the 10% tax rate increase is combined with the 4.48% valuation increase, the result is that the average homeowner’s County tax bill will increase by 15%.
(Note: All of the tables included in this post are screenshots taken from the public tax rate notices the County is required to publish. Each screenshot has a hyperlink to the corresponding notice in which it appeared.)
For the Harris County Hospital District, the Commissioners’ Court approved a 13.98% tax rate increase. When the 13.98% tax rate increase is combined with the 4.48% valuation increase, the result is that the average homeowner’s Hospital District tax bill will increase by 19.09%.
For the Port Authority, the Commissioners’ Court approved a 7.14% increase in the tax rate. When the 7.14% tax rate increase is combined with the 4.48% valuation increase, the result is that the average homeowner’s Port Authority tax bill will increase by 11.96%.
In addition, the Commissioners’ Court has also asked voters to approve a massive 65% increase in the property taxes for the Flood Control District.
If voters approve the increase for the Flood Control District, the total tax bill for all four entities for the average homeowner will jump from $1,159 last year to $1,379 this year, a 19% increase.
The 2023 Tax Increase
As I mentioned previously, this increase comes on top of another large increase in the tax bills last year. However, the math last year was different.
Last year, there were small increases in the tax rates for the County and the Flood Control District with small offsetting reductions in the tax rates for the Hospital District and the Port Authority. But HCAD projected at the time that the value of the average home would increase by 9.3%. As a result, the Commissioners’ Court knew that if they held the tax rate close to even, taxpayers would be paying about 9% more. The end result was an overall 9.7% increase last year.
When added together, the taxes for the average homeowner will increase in just two years by 29.5% ($1062 → $1,379).
According to the Bureau of Labor Statistics, from the beginning of 2023 through the first quarter of 2024 (their last published data), average wages for Harris County were only up by 3.9%. So, Harris County taxes over the last two years have grown more than the rate seven times higher than Harris County’s residents’ wages.
The increase in Harris County taxes is five times the rate of inflation for our region over the last two years.
Of course, homeowners are only one piece of the property tax pie. The increases in the total tax levy by the County provides a more macro view of the magnitude of the increases over the last two years. Again, according to the County’s tax notices, the total levy for all four entities has gone from slightly under $3.1 billion in 2022 to nearly $4 billion for this year, a staggering 28.7% increase in the overall tax burden from the County in just two years. Frankly, I have never heard of a property tax increase even close to this magnitude before.
And keep in mind that is on top of historic increases in the amount that County has siphoned from the Harris County Toll Road Authority.
This tax increase will be felt by every person and business across the county. The cost of everything will be higher as result of it and that will be on top of the current inflation we are already dealing with.
I am not sure when, or perhaps, if ever, these elected officials will come to comprehend that people to do not have to live here. Ultimately, they will vote with their feet. Indeed, they have already begun to do so. In the last decade, Harris County’s net domestic migration has been a negative 200,000. I suspect these massive tax increases will send more running for the exits.