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Uptick in property rolls probably means no Dallas County tax rate increase

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Lincoln Heritage Mortgage Steven Jeffers LHM The Honest Solutions Company Dallas Budget 2012

Dallas Budget 2012

An uptick in Dallas County’s property values means residents probably won’t see a tax rate increase this year, and commissioners are likely to avoid any mass layoffs.

Although preliminary residential values were down slightly, the county’s preliminary overall property tax rolls increased by more than 5 percent over final rolls from last year, driven in part by a more than 10 percent increase in commercial property values.

And while those numbers are likely to be tamped down as property owners protest their annual valuations, the news is still just good enough for officials who say the county is already within striking distance of a balanced budget.

“It is strong evidence for my position that a tax increase is unwarranted,” County Judge Clay Jenkins, a Democrat, said after county commissioners were briefed Tuesday on preliminary tax values released late last week.

Last year, the county struggled to close a budget gap of more than $30 million as the nationwide economic slump took another in a series of bites out of property values. County officials balanced the budget through a number of measures, including asking cities to pay their share for sheriff’s traffic enforcement and eliminating positions through attrition.

Earlier this year, county officials projected that the shortfall for the next operating budget, $436 million, would be about $9.8 million. “That’s the first ray of sunshine we’ve seen in the last four years,” Commissioner Mike Cantrell, a Republican, said at the time.

Tuesday, Jenkins said county officials now think the gap will be even lower.

Low tax rate

Commissioners have been reluctant to raise the tax burden on residents during the economic downturn. The county has one of the lowest tax rates in Texas at 24.3 cents per $100 of valuation, and the last increase was in 2010.

County Commissioner John Wiley Price, a Democrat, welcomed the news of rising property values, saying it means “we’re not having to plan this year’s budget based on a decrease” in the tax rolls.

Unlike city governments, whose revenue sources also include sales taxes, the county is largely dependent on property taxes.

“We are a pay-as-you-go county,” Price said. “We’re set to be debt-free by 2021. Show me how you can do better on the fiscal side of the aisle than what Dallas County is doing. If you live in Dallas County, you have not voted on a bond election since 1991.”

He said that shows the “frugality” of the Commissioners Court.

County Commissioner Elba Garcia, also a Democrat, said the property values are indicators that the economy is improving.

“While the picture is still gloomy, it’s a lot better than what we had in the past,” she said. “Considering the last three years, this is good news.”

In 2011, the certified taxable value of properties in the county was $155.5 billion. The preliminary value for 2012 is $163.5 billion, but the roll won’t be finalized until late July, after most appraisal appeals are exhausted.

Garcia said that in recent years, the bleak fiscal situation forced the Commissioners Court to “cut to the bone.” She said she hopes the improving property values mean no more significant cuts or layoffs are in the offing.

“I would never say never, but a tax increase is not on the table right now,” Garcia said.

Commissioner Maurine Dickey, a Republican who is not running for re-election, was not at Tuesday’s meeting. Cantrell could not be reached later in the day to discuss any potential tax rate increase.

Housing still hurting

On the residential front, construction starts in Dallas County have fallen. Property tax values were flat to down across the board in the northern and southern sectors.

“New construction is still way down,” Dallas County Chief Appraiser Ken Nolan told commissioners during his briefing. “This is considerably down from, let’s say, four or five years ago. It’s getting better, but it’s not where we were in ’06 or ’07.”

Home sales continue to lag largely because financing remains difficult to obtain, he said.

“If people can’t get money to buy homes, there’s not going to be a lot of sales,” Nolan said.

Building permits are also down for commercial construction, but there’s a feeling out there that the market has hit bottom and is ripe for a rebound, Nolan said. He also noted increasing demand for luxury multifamily housing.

“Apartments are red hot right now,” Nolan said. “Rents are going up. …We didn’t overbuild like we did back in the ’80s.”

Jenkins sees this as evidence that the local economy is picking up steam.

He anticipates that this year’s budget gap can be closed through unspecified efficiencies. He also does not anticipate across-the-board layoffs and would like to give the county’s 6,000 employees at least a 2 percent cost-of-living raise.

Garcia said she also would be open to pay increases. County employees have not had cost-of-living raises for four years.

“We need to keep their buying power at least equal to inflation,” Jenkins said. “It would be penny-wise and pound-foolish if we lost talent or failed to attract top talent to Dallas County.”

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