San Angelo's Property Tax Woes

Since the so-called oil boom that reflected in the economy in mid-February 2013, Tom Green County witnessed increased values in the housing market. Some residents, however, cannot understand why property taxes continue to rise since the oil bust.

Brad Wells, Tom Green County Appraisals District explained, “Our data indicated to us that in mid-February of 2013 is when change started to come to Tom Green County, as far as property values and property taxes.”

Wells gave the history of these changes that started when he moved to San Angelo in 2003.

“It is proven that since I started collecting data, it’s been a very slow and gradual market appreciation on residential property, primarily from about 3 percent to 3 percent and a half almost every year,” Wells said.  

He gave the example that if an average home's value was $100,000 and it went up 3 percent in a year, the following year the price would be worth $103,000.

The taxpayer’s taxable responsibility to their jurisdiction is minus any exemptions multiplied by the current tax rate for that year .   

“This is just to the jurisdiction that establishes that rate, and, in the city of San Angelo, there are three jurisdictions that includes the City of San Angelo, Tom Green County and San Angelo ISD," Wells noted. 

The values for the most accurate estimates come out in January and notices are sent out in May or June, which is what leads to the equalization process through ARB hearings and value determinations.

“This will produce an adjusted value in the end of July; the value will be given to each jurisdiction that is reported by chief appraiser Bill Benson for Tom Green County," stated Wells.

This number will also build the tax rate for a given jurisdiction, and is calculated as follows:

• Tax levy (Taxable value’s) ÷ by (total of all taxable assessments in jurisdiction) x 100

This formula gives taxpayers their new tax rate per hundred dollar evaluation, Wells said.

Referring back to February 2013, San Angelo was prepared for the oil field to arrive.

“San Angelo has always been a sleepy, little farming town that had never experienced the oil field,” Wells said.  

This started to happen after Midland and Odessa started to run out of living space, and the oil field workers had to head into San Angelo.

“The real estate market went berserk," Wells said. "In one year alone, from Feb of 2013 to Jan of 2014, we experienced a 16 percent rise in residential real estate values.”

The tax appraisals for Tom Green County operates under the property tax code regulated through the Comptroller Office for Texas in Austin.

Wells explained, “You shall provide value, based on the Constitution, that property owners shall pay taxes based on the market value of the property to provided funding for the school system; that is the basis of [my] job.”  

The data used is always one year behind, so the tax appraisals office has to turn in the values by January of each year. Sales information stops being used by December 31 of each year.

“We did our value and appraisal notices for 2014 using the information from the previous year. It was the first time in our district that there has ever been a county wide re-appraisal,” Wells said.

There were about 70,000 parcels accounted for, which includes personal, real estate, business and many other kinds of properties.  

Wells mentioned there are 55,000 residential properties considered single family properties. This doesn’t include apartments.

“By 2014, we sent out almost 50,000 notices of increased values that showed the 16 percent increase.”

A house costing $100,000 in 2013 could then go up to $116,000 in 2014. This would include paying the tax on the new rate. These changes in value happened regardless if any renovations were done on the house during the 2013 data collection.

In the year leading up to 2016, the rates continued to rise. Not as fast as when the initial increase started, but 2014 still showed 10.8 percent above what was appraised in 2013. Wells added that, in 2015, new notices were sent to out for an 11 percent increase in property value.

“Two years back to back, there was a 27 percent increase for property values for residential homesteads,” Wells said. “This real estate market is definitely not stable. Ten years prior to 2013, it was very stable.”   

Michael Looney, Vice President of Economic Development with the Chamber of Commerce, mentioned that property tax rates generally creep up as a city’s infrastructure and population grows. 

“For an economic development strategy, a common way to alleviate property tax pressure on residential home owners is to encourage larger companies to locate their facilities within the tax zones where single family residences are paying for the majority of the property taxes,” Looney said. “This is why, in most cities in Texas, there is a push to encourage large companies to move into areas where the majority of property taxes are shouldered by single-family residences.”

As for Tom Green, County Judge Steve Floyd doesn’t anticipate major changes. This year, the county received a $1,285.295.73 increase in revenues from increased property values and property added to the tax rolls. Of that amount, $479,969.55 new property was added to its FY 2017 tax roll. The county holds a public hearing on its property tax rate twice, Aug. 16 at 9:30 a.m. and again on Aug. 19 at 9:30 a.m. Both hearings are at the Sugg Community Room of the Stephens Public Library.

The current county tax rate is $0.51250.

Barring any major changes in the budget sessions this month, citizens owning property within the City of San Angelo are subject this this cumulative tax rate:

The table above illustrates that a property owner within the San Angelo city limits will pay $2,527.50 annually in property tax per $100,000 the Tom Green County Appraisal District reports your property is worth.

“Prices are coming down; inventory of houses is going up; and marketing times for those houses are taking longer to sell, which consequently makes home owners anxious to sell faster,” Wells said.These changes from 2013, until now, are what have showed the gradual change in Tom Green County’s housing market.  

This can cause home owners to cut their asking price down and leads to the houses selling faster, which brings full circle in the process of appraisals because information is collected from the selling price of those houses.

“If a house is listed for sale, it’s as if it doesn’t exist,” Wells said. “Once the property sells, and we can capture the sale price, it can be used for analyzing the next value cycle.”

Overall, these changes will start to stabilize with time, and homeowners can expect a gradual change because housing values won't spike as high as in previous years. 

Since 2013 the tax appraisal office has been committed to distributing reappraisals for Tom Green County’s real estate market until it becomes stable again. Wells noted he did not know when this stability would happen in the future.

Publisher Joe Hyde contributed to this story.