City of Houston

Houston City Council approves new tax rate; Turner says voters could decide on adjusting revenue cap

Houston City Council unanimously approved on Wednesday to lower the city’s property tax rate to $0.53364 – a reduction from the city’s current tax rate of $0.55083 on each $100 taxable value.

Houston City Hall
Patricia Ortiz
Houston City Hall

The Houston City Council on Wednesday unanimously approved a lower city property tax rate, $0.53364 — a reduction from the city's current tax rate of $0.55083 on each $100 taxable value.

Mayor Turner will also consider placing an item on the November 2023 ballot for voters to amend the city's cap for additional public safety funds.

The tax rate reduction marks the eighth time in nine years that the city has lowered the tax rate below the Voter-Approval Tax Rate. In 2004, voters approved to limit the city’s revenue by combining the prior year’s cap, plus population growth and inflation; or the prior year’s revenue plus 4.5%; depending on the lower of the two.

City Finance Director Will Jones gave an example of how the new rate of $0.53364 would look for homeowners in Houston.

“If someone's home is $250K, the average homeowner would save $42.98 ($51.57 for a $300K home) when you look at just the decrease in rate alone,” he said in an emailed statement. “However, because of increased in appraised values, most homeowners would not realize that savings.”

In prior meetings, Mayor Sylvester Turner along with other council members have stated the revenue cap prevents the city from bringing in the needed revenue to provide residents with services that are desperately needed in the city.

Councilmember Robert Gallegos said the revenue from the property tax should be spent in areas that are in the best interest of the residents.

"The revenue could be reinvested into public safety, park maintenance or to right side solid waste, and improve garbage collection one and for all," said Gallegos.

The city is expected to bring in $1.27 billion with the new property tax rate – $27 million more than in 2021. In fiscal year 2015, the city hit its revenue cap, when the tax rate was $0.638750 on each $100 of taxable value. Since hitting the revenue cap in 2015 and having to lower the tax rate each year, the city has lost out on over $1.4 billion according to Mayor Turner.

"Despite the fact that we lower the tax rate because the property values keep going up, we still collect more money than we did the year before," said Council member Mike Knox.

Councilmember Michael Kubosh expressed concerns over funding for public safety which includes first responders, police and firefighters due to the limited funding resources the city has.

"I don't see how we’re going to be able to fund our fire and police after all these government funds we've received from the federal government run," said Kubosh.

Councilmember Kubosh suggested allowing voters to amend the cap like in 2006, which gave public safety an additional $90 million towards police, fire, and emergency medical services.

“Citizens on their own before, took up this mantle and got the public to vote for this, and they could do it again and to remove it if they wanted to."

Mayor Turner agreed to Kubosh's suggestion to allow the voters to amend the current cap for additional funding for public safety due to the timeline of the ARPA funds.

"I'm willing to do it," he said. "The reality is ARPA fundings are going to run out, they are going to come to an end."

Mayor Turner said he will work with his team to develop an ordinance to be placed on city council's agenda.

"I will put it before you to be placed on the November ballot for next year and then the voters can decide."

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