High Property Taxes: Why You’re Paying So Much

SUMMARY

  • PART 1
    • Keep Property Taxes Low by Denying the City’s Mission to Debt-Finance Another $1.6 Billion in Capital Improvement Projects.
  • PART 2
    • Vote AGAINST” Every Long-Term, Property Tax-Supported Proposition on the May 6 Ballot.
  • PART 3
    • Compel the City to Use Short-Term Instead of Long-Term Financing Options–That Is, If You Want Quality Results Now Rather Than Later.
  • PART 4
    • Refute the City’s Misleading Claims That Propositions Won’t Raise Your Property Taxes. Evidence Suggests Otherwise.
  • PART 5
    • Understand Why You’re Still Paying More Every Year Despite Having Your Property Tax Rate Drop 5 Times in 18 Years.
  • PART 6
    • Share the Hidden Truth Behind Bexar Appraisal District’s Property Tax Rates and How The Assessed Value of Your Property Surreptitiously Raises Everyone Else’s Tax Bills.
  • PART 7
    • Know the Real Reason Why Your Property Taxes Keep Going Up, Up, and Up!
    • Stop Indirectly Taxing Yourself Through General Obligation Bonds.
  • PART 8
    • Accept That the City Doesn’t Know When to Stop; It’s up to You to Be Fiscally Conservative in the Way the City Finances Long-Term Capital Projects.
    • Vote NO” on May 6, 2017.

⇓ PART 1 

San Antonians:

If you’re tired of ever-increasing property taxes, now is your chance to take a more active role at the local level.

On May 6, 2017, vote AGAINST the City’s mission to debt-finance $1.6 billion in capital improvement projects.

Simply put, the City wants more of your hard-earned tax dollars despite already having a debt obligation of $2.3 billion, part of which is an outstanding balance of $1.8 billion in voter-approved bonds.

San Antonio's Outstanding Debt Service (as of September 30, 2016)

Authorizing the City’s request for another $1.6 billion in General Obligation Bonds (G.O.s) will only hike up property taxes, creating a much larger debt for you to repay later on.

Now is the time to make your voices heard because, unlike tax notes and Certificates of Obligation, the City can’t issue G.O.s without your approval. G.O.s, by law, require a long-term pledge by you, the taxpayer, to fund capital projects for the next 10-20 years. That also includes the tens of millions of dollars in interest every year.

⇓ PART 2 

Below is a list of propositions you might see on your ballot:

  • Southside Independent School District
    • Proposition
    • $59,750,000.00
  • Judson Independent School District
    • Proposition
    • $60,000,000.00
  • Alamo Heights Independent School District
    • Proposition
    • $135,000,000.00
  • Streets, Bridges, and Sidewalks Improvements
    • Proposition 1
    • $445,263,000.00
  • Alamo Community College
    • Proposition 1
    • $445,263,000.00
  • Drainage and Flood Control
    • Proposition 2
    • $138,988,000.00
  • Parks, Recreation, and Open Space Improvements
    • Proposition 3
    • $187,313,000.00
  • Library and Cultural Facilities Improvements
    • Proposition 4
    • $24,025,000.00
  • Public Safety Facilities Improvements
    • Proposition 5
    • $34,411,000.00
  • Neighborhood Improvements (2017 Urban Renewal Plan)
    • Proposition 6
    • $20,000,000.00

Here’s a visual representation of the Potential Outstanding Debt that you risk adding to the City’s existing $2.3 billion debt obligations:

General Bond Obligations - Ballot Propositions - Potential Outstanding Debt

Out of these 10 propositions, Alamo Community College District (ACCD) wants the most from you: $445 million, nearly half a billion dollars.

In a previous article, I justified why ACCD is able to fund its own repairs and expansion. It truly doesn’t need more of your hard-earned tax dollars because over 40 percent of its total revenue already comes from property taxes.

Annually, ACCD receives $450 million, so it SHOULDN’T be asking you for an advance of $445 million.

⇓ PART 3 

TAKE NOTE that all of these propositions will be funded with General Obligation Bonds.

And as you already know, G.O.s. are specifically tailored for LONG-TERM capital projects. The City is essentially saying that it doesn’t want to deal with existing problems in the short term; instead, it wants to handle them in 10 to 20 years. The thing is, by then, the City will require even more money to fix problems that it should’ve fixed long ago.

Not only that, but because of San Antonio’s current economic situation, the City feels 2017 is the ideal time to ask taxpayers for a blank check of $1.6 billion. However, don’t let the City take advantage of you at a time when everything seems all right. The future is uncertain, and if something bad were to happen, you’ll have to endure the consequences of insurmountable debt and higher property taxes.

Arguably, PROPOSITIONS involving streets, schools, bridges, colleges, and so on CAN BE (and SHOULD BE) addressed in the SHORT TERM–that is, within one to seven years.

So if you need the City to fix EXISTING problems NOWvote “NO” to each of the City’s proposed LONG-TERM, PROPERTY TAX-SUPPORTED capital improvement projects. Doing so will ensure that critically planned improvements start within the current fiscal year—not in 10 or 20 years.

Voting “NO” also forces the City of San Antonio to use what’s called “short-term financing,” such as tax notes, Certificates of Obligation (C.O.), and revenue bonds. These don’t require voter approval but can be used as needed to construct, expand, and renovate new and existing buildings.

Indeed, several instances in the past have proven that the City DOESN’T NEED to rely on PROPERTY TAXES to finance the construction of general improvements (e.g., streets, drainage, parks).

Back in 2007, for example, voters approved $550 million dollars’ worth of General Improvement Bonds, but after the City sold some of its General Improvement Bonds in 2008, it used revenue from the City’s parking system to retire the outstanding debt.

In 2011, the City issued nearly $400 million dollars’ worth of outstanding C.O.s to finance capital improvement and infrastructure support, similar to what is being proposed on the May 6 ballot.

And, yes, you heard right. In 2008, the City REFINANCED a portion of the $550 million in General Improvement Bonds by issuing ANOTHER bond to pay it off. The City routinely finds ways of acquiring new debt (i.e., refunding bonds) to pay off old debt, primarily for expediency or lower interest rates.

However, San Antonians can all agree that taxpayers SAVE MORE by NOT taking out DEBT to fund ongoing capital improvement projects.

REMEMBER: The ballot is only a list of recommended drawn-out projects seeking to expand the City’s long-range physical infrastructure development. It’s ultimately up to you—the taxpayer—to tell the City,

“Hey, let’s focus on improving what we have now because that alone requires a lot of work. As such, I DON’T AUTHORIZE the City to use my hard-earned tax dollars to fund any more long-term, property tax-supported capital projects.”

⇓ PART 4 & 5 

Of course, the City of San Antonio as well as the Alamo Community College District (ACCD) claim that some (or all) of their propositions

“[won’t] raise district property taxes.”

Yet the evidence clearly suggests otherwise.

Yes, the Bexar Appraisal District (B.A.D.) won’t increase your Property Tax Rate. Historically, it’s never done that–in fact, within the last 18 years, B.A.D. has DROPPED the Property Tax Rate five times by an average of $0.004304 cents.

Historical - Total Tax Rate Fiscal Years 1999 to 2017

But think about it: Why are you still paying more every year despite having your Property Tax Rate drop five times?

According to B.A.D., a Tax Rate Reduction serves to minimize the adverse financial effects of debt-funded projects (such as those listed on the May 6 ballot).

Humorously, when B.A.D. brags about saving taxpayers “hundreds of millions” by reducing the overall property tax rate, that’s partly true. In reality, B.A.D.’s claims are based on the COLLECTIVE savings of ALL taxpayers.

However, for your INDIVIDUAL property tax bill, B.A.D.’s Tax Rate Reductions have done LITTLE, if anything, to save YOU money.

Keep in mind that whenever you approve G.O.s, you empower B.A.D. to levy additional taxes on your mobile home, real property, and personal property at 100 percent of the appraised market value.

In other words, as long as your property continues to provide revenue for the City’s lavish debt spending, B.A.D. won’t increase your Property Tax Rate.

And that, my friend, is THE SOURCE of all of your property-tax problems.

⇓ PART 6 

First off, you’re paying more every year because B.A.D. continually appraises your property at higher and higher values, all in an attempt to generate enough revenue for the City’s growing budget. That, in of itself, offsets the need to raise overall property tax rates.

B.A.D.'s Certified Values FY 2012-16
Certified Values for FY 2012-13 (1.5 percent); FY 2013-14 (5.5 percent); FY 2014-15 (7.2 percent, $7.6 billion); FY 2015-16 (14 percent, $15.6 billion).

See, the appraisal system works in one of two ways:

PROPERTY TAX RATES will go up IF

  • Property values either remain the same or fail to generate enough revenue for the CITY’S BUDGET.
  • Property values either remain the same or fail to generate enough revenue for the CITY’S DEBT OBLIGATIONS.
    • Currently, the City’s debt consists of $1.8 billion in voter-approved bonds; however, 2017’s G.O.s will bring that amount to $3.4 billion. Since the future is uncertain, San Antonians may want to reconsider piling on more debt for projects that won’t begin until 2030 or 2040.

On the other hand, the ASSESSED VALUE of your property will go up IF you

  • upgrade/remodel (i.e., new improvements), or—and this is very important—
  • live in an area of rapid economic growth.

The majority of San Antonians are evidently facing the problem of rapid economic growth. Simply put, property values have risen to reflect the demand for San Antonio housing.

Additional Value Generated From New & Existing Properties (FY 2012-16)
Additional Value Generated From New & Existing Properties (FY 2012-16)

PART 7

The main thing to remember here is that voting for any proposition on May 6 will generate new improvements,” not to your home but AROUND it–mostly in the form of new neighborhoods, high-end housing, public schools, local parks, community colleges, and so on.

All of these “new improvements” are TAXABLE since they are an integral part of the area’s economy.

So, depending on how many “new improvements” you vote for, the Bexar Appraisal District (BAD) will—of course—raise your property values to reflect what’s been added to the city. That means despite having the same property tax rate as last year, you’ll still pay MORE this year because the value of your property went up as a result of the new improvements you voted for.

Historical Growth in Property Values FY 2002 to FY 2013

You are essentially TAXING YOURSELF every time you authorize the City to use General Bond Obligations.

G.O.s enable the City to FUND new capital projects that CREATE taxable improvements which RAISE property taxes and, ultimately, generate revenue for the City to fund even LARGER budgets that are filled with even MORE capital projects.

City of San Antonio Adopted Annual Budget (All-Fund Totals) FY 2002-17

It’s a never-ending cycle, one in which you can always expect your bill to go up year after year.

In some ways, that’s good, but one could also argue that TOO MUCH “growth” is happening, and you—the existing taxpayers—can’t keep up with the costs of maintaining and expanding the city.

You’re simply not there yet.

⇓ PART 8 

So, on May 6, ask yourself the following questions:

  • “Is this is truly what I want?”
  • “What kind of city do I want to live in for the next 10 or 20 years?”
  • “Can the funds be better spent elsewhere?”
  • “How much am I willing to pay to stay here?”
  • “Am I ready to debt-finance another $1.6 billion for “growth,” even though I’m already paying too much in property taxes?”

Truth is, sometimes the City doesn’t know when to stop, so it’s up to you—the taxpayers, the residents of San Antonio—to be fiscally conservative in the way the City finances long-term capital projects. Otherwise, you’ll be footing the bill for decades, and honestly, there’s really no point in paying more for what will come later as a result of NATURAL growth, not debt spending.

REMEMBER: The crux of your problem is Capital Improvement Projects, which are funded with property tax-supported General Obligation Bonds.

Vote “AGAINST” the City’s mission to debt-finance $1.6 billion in capital improvement projects. You, and every other San Antonian, will prosper a lot more if you do.


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