Embodied in Article VIII, Section 21(a) of the Texas Constitution, Truth in Taxation (TNT) requires local governments to make property owners aware of tax rate proposals and to provide the opportunity for them to have input into tax increases.

Local governments create a budget then propose a tax rate to support funding that budget based on values determined by county appraisal districts (CADs). Requirements and limitations are determined through laws – primarily the Texas Property Tax Code but also the Education and Water Codes. The majority of governments currently have a spending limit of 3.5% with automatic November elections if this limit is exceeded. Texas school districts have a 2.5% limit. Voter approved debt (I&S or interest and sinking fund) is not subject to these limits.

Senate Bill 2, passed in the 85th Legislative Session, increased transparency and is making it easier for property owners to find out important information about their local governments during the assessment process. Assessment is not about value (that is appraisal and is the responsibility of CADs). Assessment is the process of calculating the tax rates using the appraisal rolls, tax rates being proposed by local governments, hearings being held and rates adopted.

Because of SB 2, you received a postcard from your county appraisal district directing you to a property tax database that contains much (but not all) of the information you need to voice your opinion to local governments and officials regarding the tax rates they are proposing. Reviewing this link as well as the CAD database, you should be able to obtain all of the information you need to speak up before it is too late to have a voice in the amount of YOUR money local governments intend to spend for the coming fiscal year.

Rate Name Changes

The No New Revenue Tax Rate (formerly the Effective Tax Rate) is a rate that will provide about the same amount of revenue as the year before on property taxed in both years. If property values rise, this rate will go down.

The Voter Approval Tax Rate (formerly the Rollback Tax Rate) is the maximum rate allowed by law without voter approval (in 99% of the cases).

The De Minimis Tax Rate is a rate equal to the No New Revenue Maintenance Operations Rate + the rate that will generate $500,000 of revenue when applied to the taxable value + the current Debt Rate. This rate is not used by all governments.

The Unused Increment Tax Rate (equal to zero in 2020) is the difference between the Voter Approval Rate and the actual adopted rate each government adopts. The unused amount or increment may be banked for a three year period and “saved for a rainy day” to increase taxes when the need arises.

The Debt Rate is a rate calculated against the total taxable value (after adjustments for collections) that is used to repay voter approved debt.

Five Year Tax Rate History - Galveston County Governments

The below file includes a five year history of all of the calculated and adopted rates for all Galveston County governments that have properly reported them. This information is provided as required by Section 26.16 of the Texas Property Tax Code.

2020 Five Year Summary Report TNT March 2021.pdf