If you’ve ever wondered why I am so adamant about wanting to seek an increase in the standard homestead exemption for residents of Jersey Village, this table tells the tale pretty clearly.
Over the last four years, the average single family home in Jersey Village has seen their property taxes go up by 23.2% when adjusted for inflation. While the biggest jump was in 2015, we have seen increases, albeit gradually lower increases, each subsequent year. From 2010 to 2013, however, per home property taxes remained fairly flat.
Update, October 18, 2018: The 2018 appraisal rolls now appear to be largely complete, with all or nearly all properties now certified. I have updated the figures in the table above, and the Excel spreadsheet linked below.
If you would like the Excel spreadsheet represented in the image above, you can click here to download it.
Why not pay off our debt instead?
I would be all for paying our existing debt early, but we can’t. I know, that sounds crazy, but there’s a fairly simple reason for that.
When you and I need to incur debt, whether to buy a home, a car or some other item, we usually use either a loan or a credit card. Consumer debts often allow for accelerated payment of that debt when we have the ability to make more than the minimum payment.
Cities, like Jersey Village, on the other hand, typically issue bonds in order to incur debt. Those bonds have a number of features including a “callable” date. Unlike other securities, like stocks, many bonds have a call provision which allows the original issuer of the bond (the city) to re-purchase the bond before its maturity date. When cities issue bonds with early call provisions, the interest rate is often higher. Therefore, care must be taken to balance the desire of the city to get the best interest rate possible while providing reasonable flexibility to pay the debt off earlier.
We currently have two series of bonds outstanding currently. Our General Obligation Refund Bonds Series 2012 are not callable until 2021. Our General Obligation Refund Bonds Series 2016 are not callable until 2026. So while I would support paying these bonds early, we cannot do so until 2021 at the earliest.
Use increases in sales tax to reduce property tax
We have continued to see sales tax increase every year. For calendar year 2019, we’re due to potentially see a 59% increase in our overall sales tax revenues due to our successful agreement with Argos USA to relocate their sales office to Jersey Village next year. I believe we will continue to see sales tax revenues increase at an accelerated rate now that U.S. Highway 290 construction is coming to an end, oil prices appear to have stabilized, and the economy is thriving.
Now is the time to make good on our obligation to our citizens to only tax them to the degree absolutely necessary to provide the services and amenities they desire. It would be wrong to continue accruing large budget surpluses year after year while continuing to sit on an extraordinarily large existing balance. Yes, we have some large capital projects coming up with flood mitigation, street replacements and possibly a new city hall. But even after those projects are completed, all of the numbers indicate that we’re in a healthy enough position to provide citizens with a maximum standard homestead exemption just as the majority of cities in this region have done.
I encourage you to contact your city council members and let them know that you support an increase in the homestead exemption from the current 8% to the maximum allowed under state law, 20%.