HomeMy WebLinkAboutIR 7085 INrORMAL REPORT TO CITY COUNCIL MEMBERS No. 7085
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"'qT`"` January 14, 1986
`'A4 sorrr�r To the Mayor and Members of the City Council y
xrFXA`' Subject: PROPERTY TAXES IN SELECTED TEXAS CITIES
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Recently the Fort Worth Chamber of Commerce prepared an analysis of "true"
property tax rates and tax burdens for four selected Texas cities--Austin,
Dallas, Fort Worth, and Houston. The analysis included all property tax
rates applicable to a property owner in each city, (i .e. , city, school ,
county, etc.). The purpose of the Chamber's study was to demonstrate that
although Fort Worth's actual tax rate (the rate which is applied to the
appraised property value) is significantly higher than the other three
cities, its total "true" tax rate (the actual rate multiplied by a ratio
computed by comparing appraised property values to market values) is actually
the third lowest of the four cities. The ratios were obtained from a Texas
State Property Tax Board study made of 1983 tax rolls.
Once the Chamber determined the total "true" tax rate in each city, that
number was applied to the value of a comparable single-family home and a
30,000 square foot commercial building in each city to evaluate the actual
tax burden, in dollars , for property owners .
To arrive at a comparable single-family home value for the four different
cities, the Chamber staff consulted three home builders who build homes in
each of the four cities. Using a 1,600 square foot , 3 bedroom, 2 bath new
home as the standard to compare across cities, each builder was asked to
estimate what that particular home would sell for in each city. The Chamber
then averaged these three builders' estimates and arrived at what the cost
would be in each city for the comparable house. Their results were that the
home described above would cost:
$92,000 in Austin
$76,167 in Dallas
$71,300 in Fort Worth
$61,000 in Houston
To arrive at a cost figure for the 30,000 square foot commercial building,
the Chamber contacted a large real estate management firm which handles
property in all four cities. They asked the firm to estimate the median
price per square foot for commercial space with certain characteristics.
This median price per square foot was then multiplied by 30,000 square feet.
The total "true" tax rate was then applied to this value and a tax burden was
determined for each of the four cities.
Because the Chamber study used ratios based on 1983 tax rolls and 1964 tax
rates , City staff has secured information to update the study using 1985 tax
rates and ratios with the 1965 comparable values.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INtORMAL REPORT TO CITY COUNCIL MEMBERS No. 7085 -p.2
4caar, To the Mayor and Members of the City Council January 14, 1986
00W
C9 PROPERTY TAXES IN SELECTED TEXAS CITIES
1!?! Subject:
The 1983 ratios used in the Chamber study were completed by the State
Property Tax Board and the 1994 ratios presented below were developed by the
Texas Research League from Property Tax Board data. The 1985 ratios are
projections made by City staff using tax roll data secured from the four
taxing jurisdictions. The State Property Tax Board's 1985 statewide study
will not be available until mid-1986.
1983 1984 1985
Austin -72.5% 89.3% 93.6%
Dallas 87.0 80.0 80.0
Fort Worth 53.8 77.7 75.5
Houston 81.4 90.5 96.0
The chart below shows the 1985 property tax rates of the taxing jurisdictions
in the selected cities and the total "true" tax rate when the ratio is taken
into account:
OPOI Actual Property Tax Rates Totalled and Converted
To Total "True* Tax Rates Per $100 of Appraised Value
Total
"True"
City school college Hosp. County Other Total Ratio Tax Rate
Austin 28 0 0
-.212 -1 .028 1.6141 93.6 1.511
Dallas .4918 .6523 .0388 .126 .1354 0 1.443 80.0 1.154
Ft.Worth 739 .6565 .02969 .11417 .11725 .00804 1.66465 75.5 1.257
Houston 495 .7045 0 .13385 .27878 .0663 1.67743 96.0 1.610
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No 7085 -p.3
�a4aaRr,�� To the Mayor and Members of the City Council January 14, 1986
Subject:
PROPERTY TAXES IN SELECTED TEXAS CITIES
The charts on this page use the comparable residence and commercial building
cost provided by the Chamber of Commerce to demonstrate a "true" tax cost
comparison for comparable real property in the selected cities.
"TRUE" TAX COST COMPARISON ON A COMPARABLE SINGLE-FAMILY HOUSE
IN SELECTED TEXAS CITIES
City Total
House "True#1 City "Truell Total
City Cost Tax Rate Tax Tax Rate Tax
Austin $92,000 .4942 $454.66 1.511 $1,390.12
Dallas 76,167 .3934 299.64 1.154 879.35
Ft . Worth 71,300 .5579 397.78 1.257 896.24
Houston 61,000 .4752 289.87 1.610 982.10
"TRUE" TAX COST COMPARISON FOR A 30,000 SQUARE FOOT COMMERCIAL BUILDING
IN SELECTED TEXAS CITIES
City Total
Cost Per Total "True's City "True" Total
City Sq.Ft. Cost Tax Rate Tax Tax Rate Tax
Austin $48 $1,440,000 .4942 $7,116.48 1.511 $21,758.40
Dallas $30 900,000 .3934 3,540.60 1.154 10,386.00
Ft.Worth $22 660,000 .5579 3,682.14 1.257 8,296.20
Houston $35 1,050 ,000 .4752 4,989.60 1.610 16,905.00
Please let me know if you have quewtions or require additional information on
this issue.
Douglas Harman
City Manager
-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS