PHOTO: A crew lays the foundation for Victoria Town Center on Loop 463, on Aug. 26. The shopping center is projected to generate approximately $77,000 in property tax revenue and $622,000 in combined sales tax revenue for the City and the Victoria Sales Tax Development Corporation per year.
During the Aug. 2 City Council meeting, the council proposed lowering the property tax rate by 3 cents per $100 of valuation. In spite of the lower rate, the City’s property tax revenue is projected to go up 5.11%—about $1.37 million—if the new rate is adopted. How is that possible, and what does it mean for the taxpayer?
The City’s property tax revenue is based on total property values and the tax rate. If total property values go up, the City can lower the tax rate and still see an increase in funding. However, it’s important to remember that “property values” doesn’t just refer to your home’s appraised value.
This year, about 48% of new property tax revenue in Victoria came from new developments or improvements or developments that were not taxed previously (like Caterpillar’s Victoria site, which will pay taxes on $59 million worth of property value for the first time this year as one of its abatements expires).
New developments are good for the City’s financial health because they create new sources of property tax revenue and help to shift the property tax burden away from homeowners.
At this point, it may be helpful to clarify what the City does and doesn’t control:
Property appraisals: NO
Property appraisals are determined by the Victoria County Central Appraisal District. They’re also the ones you should talk to if you believe your property was appraised incorrectly.
Property tax rate: YES
Each year, when the City Council votes on the new budget, they also vote on a new tax rate. The Council looks at property values to determine how much revenue the new tax rate will produce.
Property developments and improvements: SORT OF
The City doesn’t have any direct control over which businesses come here or what improvements property owners decide to make, but the City can help to encourage development. The methods that the City uses will be discussed in greater detail in a future blog post.
As home values continue to rise around the state, it is likely that many residents will pay more in property taxes this year. But if the new low rate is adopted, the increase won’t be as high as it could have been—and thanks to new developments, the lower rate will still bring in more funding for street repairs, facility improvements and other projects that will enhance livability in our community.
The City Council will vote on both the budget and the tax rate on Aug. 30 and Sept. 6. If approved, the new budget and rate will go into effect Oct. 1.
To review the proposed budget, visit www.victoriatx.gov/budget.
Sam Hankins is the communications specialist for the City of Victoria.