Let’s Talk About Taxes – Part 2

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(Read Part 1 Here)

(See the end of this post for an update added on 9/12/21.)

For the third year in a row since he was elected as Williamson County Judge, Bill Gravell has broken his campaign promise to “slash” your taxes. It was a foolish promise. The budget and tax rate are decided on by all five members of the Commissioners Court, not the County Judge alone. The county portion of your property tax is only a fraction of your total property tax bill. Slashing your county taxes would mean crippling cuts to essential services in public safety and infrastructure. 

Well, now Bill Gravell has voted to raise your taxes three years in a row. Back in the 2018 campaign, he accused his Republican opponent, Frank Leffingwell, of being a liberal during his time on the Round Rock City Council, for raising taxes “year after year.”  Does this now officially make Bill Gravell a liberal? It certainly makes him a hypocrite.

It was a foolish campaign promise. Whether it sprang more from ignorance or from willful deceit, I will leave for others to judge. Either way, we deserve better from our elected officials. 

Overall revenue for the county is being raised by several million dollars. That means higher taxes. But where the rubber meets the road is how much more you, as a property owner, will pay. The office of the Tax Assessor/Collector has created a very helpful tool for you to see how the changes from last year to this year will affect you across all of the taxing entities of your property. On this page, enter your name or address to find your property. You can compare the taxes you will pay this year to what you paid last year. But you can also compare that to what you would have paid if the Commissioners had decided to not raise any new revenue. Remember to add together the two lines that say “Williamson County” and “Williamson County FM/RD” for the full picture of the county portion of your tax bill.

Please note: You will notice that the actual tax rate is lower this year. This is because property values have spiked so much that even lowering the tax rate will result in you paying more taxes. In fact, the rate adopted by the Williamson County Commissioners today is the highest it can be under the law without triggering a vote by the people to approve it.

But wait, there’s more! On August 3, 2021, the Commissioners Court voted to add $175 million of debt to the county using something called a Tax Anticipation Note. No public discussion or comment has been held about what this money will be used for. Voters are not required to approve this kind of debt, unlike the bonds approved by WilCo voters in 2019. But it is our debt. We will have to pay it back with our taxes. In other words, this is another tax on the citizens of Williamson County, just by a different name. And it happened without our approval and without any public discussion or debate.

When it comes to budget and tax rate decisions, this is my two-fold promise to you. When I am Williamson County Judge: 

  1. I will work with the four Commissioners, all our elected officials and department heads, along with our award-winning Budget office, to craft a budget that is fair, prudent, and meets the needs of our growing county.
  2. I will tell you the truth.

* * *

Update (9/12/21): Analysis of 2020-2021 homestead taxable values reveals that 2 out of 3 residential homestead property taxpayers will pay more in 2021 than in 2020. The increase in taxes for the median taxpayer is around $38.

In Commissioners Court on 8/31/21, Tax Assessor/Collector Larry Gaddes calculated that the average homestead property owner will pay $14 less this year than last year. Commissioner Long instructed the Public Information Officer to include that tidbit on the County’s press release, and so it was.

I reached out to Larry Gaddes and he provided me with the summary data from the Williamson Central Appraisal District from which he derived his calculation. I also reached out to the WCAD directly and obtained a dataset of Taxable Values for Homesteads in both 2020 and 2021. I was able to confirm that Mr. Gaddes’s statement was accurate given the underlying data he was given. However, this is a classic case of a statistic that obscures the truth more than it reveals. (For the record, I do not believe it was Mr. Gaddes’s intent to obscure or mislead. He stated that he had just made the calculation on the fly a few minutes earlier. But I do believe that it was a very useful sound bite for the Commissioners to seize upon for their political benefit.)

But here’s the truth: The calculation of an “average” does not answer the question of what the reality is for *MOST* Williamson County taxpayers from 2020 to 2021. That’s what I wanted to understand. Which is why I requested the data from WCAD and did the work to find out.

1. I had to determine which properties were on the tax rolls both in 2020 and 2021. I did vlookups in the Excel document to eliminate records that were on 2020 but not on 2021, as well as those on 2021 but not on 2020. The 2020 dataset began with 131,355 records. The 2021 dataset began with 135,548.(*a) I determined that the number of Homestead properties matching on both datasets was 126,640.

2. There were 2,284 properties in which the taxable value, and therefore the tax for both years, was $0. Though they represent less than 2% of the data, I removed them to more accurately identify taxpayers who paid more or less between 2020 and 2021. This yielded a final number of 124,356.

3. Next, I multiplied the 2020 taxable value by the 2020 combined tax rate of .458719 per $100, and multiplied the 2021 taxable value by the 2021 combined rate of .440846 per $100.(*b) At this point, it was very simple: For each property, compare the 2020 tax with the 2021 tax. 

4. Out of 124,356 records, 81,533 showed an increase in 2021 (65.6%), while 42,822 showed a decrease (34.4%), and exactly one property showed the same tax each year down to the penny.

5. The decimal-point specificity of the preceding calculation is not necessary in order to understand the importance of the real world conclusion: 2 out of 3 homestead property owners will pay more in 2021 than they paid in 2020. Here’s another easy number to remember: The median amount of tax increase in this dataset is $38. The median means the taxpayer in the exact middle of the list. It may not be a dramatic difference, but it is a real difference from the misleading stat of an “average” decrease of $14. An average is an abstraction. The median is a real person, a real taxpayer. And the “$14 average decrease” doesn’t even compare the actual taxpayers in 2020 with the same taxpayers in 2021.

6. I have taken the time and effort to honestly address the data available to me. I have identified two ways in which my calculations are conservative.(*b-c) In other words, I am certain that I have over-counted the number of taxpayers who will pay LESS in 2021 and undercounted the number who will pay MORE, but because of the data available to me I am not able to reflect it in the numbers. Therefore, I am happy to just point those things out and leave them as a demonstration of my good faith and my confidence in the conclusion:

2 out of 3 residential homestead property taxpayers will pay more in 2021 than in 2020

*Notes and caveats:

a. The data provided by WCAD is a snapshot in time. I requested the data from WCAD on 9/2 and it was provided to me on 9/10, and thus it reflects the state of the data sometime during that period. Datasets requested before or after that time will show some differences but should not significantly affect the analysis here. 

b. The combined tax rate for Williamson County includes the standard rate and a much smaller Farm Road rate of .04 per $100. The new exemptions introduced this year do not apply to the Farm Road rate. However, I was not able to separate my calculations between the two rates, which means the tax I am calculating for 2021 is going to be LESS than what the county calculates by anywhere from a few pennies to a few dollars. After examining several edge cases, I estimate that this means I am undercounting the number of taxpayers who will pay more in 2021 by over 100. This provides a conservative buffer for my conclusions.

c. My calculations are over counting tax decreases between 2020 and 2021 in another way. The data available to me does not permit me to account for “frozen” tax payments between 2020 and 2021, for example, for those aged 65 or over. Essentially, those taxpayers will pay the same amount in both years, but the data from WCAD does not give me insight into that information. The examples I’ve been able to find in my dataset are being counted as tax decreases. I am not yet able to estimate how many of these exist, but it provides yet another buffer of conservatism for my analysis.

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