Brazoria County land values increased by $4.1 billion in 2020 from the previous year, according to Brazoria County Appraisal District preliminary values.
The preliminary values are before residents protest their property values, which they have until June 3 to do.
This sounds right to Brazoria County Judge Matt Sebesta, considering the numbers are based on a property’s value on Jan. 1.
“We’ve had a booming economy and we’ve had a housing shortage,” Sebesta said.
The appraisal district is governed by state law. It uses the market approach to value property, which is based on sales prices of similar properties, according to the Texas Comptroller.
“It compares the property being appraised to similar properties that have recently sold and then adjusts the comparable properties for differences between them and the property being appraised,” the comptroller website states.
The state regularly audits the appraisal district on different aspects of its work, including setting fair values, Brazoria County Chief Appraiser Cheryl Evans said.
Though local leaders have called for the state to allow the appraisal district to freeze values at 2019 numbers, the district continues to follow state law, which hasn’t changed.
The appraisal district has not yet determined how much increased value comes from new property vs. existing property, which usually happens when values are certified in July, Evans said.
Preliminary numbers show Brazoria County has about $35 billion worth of property, a 13.38 percent increase from the most recent 2019 value of about $31 billion. This is the largest increase the county has experienced in property value since 2016, when it increased 15.44 percent, according to the appraisal district.
In 2019, there was a 10.55 percent increase and in 2018, the increase was 9.75 percent, appraisal district numbers show.
Brazoria County tends to lower the tax rate when taxes go up, Sebesta said. He always urges Commissioners’ Court to adopt the “no new tax rate,” previously known as the effective rate, he said.
“With the values going up, we will lower the tax rate again,” Sebesta said.
This is the same thing that has happened for the past decade, and the county’s tax rate has dropped 8.33 cents in the past five years, he said.
The amount of taxes people pay is determined by their property value times the tax rate, which many people misunderstand, Sebesta said. The county does its part to drive its part of the multiplier down, he said.
Other taxing entities such as school districts, municipalities and emergency services districts, make up the remainder of a property owner’s tax bill.
Iowa Colony’s city appraisal value increased by 170 percent, and while that information surprised city officials, it’s an increase they planned for and were expecting, consulting city manager Ron Cox said.
Data from the appraisal district shows the value of Iowa Colony in 2019 was about $268 billion, while preliminary data for this year places the value at about $726 billion.
Cox attributes the new value to subdivision growth and annexation, he said.
“The city annexed … Sterling Lakes,” he said. “That’s gonna account for a lot of that 170 percent … out of the 170 percent, it’s probably gonna be over 100 percent.”
There is also new construction in the Meridiana subdivision, which already was within city limits, and that accounts for the rest of the growth in value, he said.
“We’re pleased to see that, but with that growth comes greater responsibility,” Cox said. “Fortunately … we’re able to finance those new responsibilities as well.”
The second-largest increase in city appraisal values over the past year belongs to Holiday Lakes, though town officials are not sure the reason for it.
In 2019, the certified appraisal value was more than $8 million, and in 2020, the preliminary value has almost doubled, coming in at more than $16 million, an increase of 90 percent.
“They’ve gone up in value on everything,” Town Secretary Cindy Clark said. “The mayor took one look at it and goes, ‘Yeah, that’s not gonna stand.’”
The majority of people are expected to protest their property value, Clark said.
“They doubled our land value,” she said.
Appraisal district reasoning for that is linked to Holiday Lakes’ flooding history, Evans said.
Holiday Lakes completely flooded in 2018, so the values went down, “and then the next year it got a little better and a little better,” she said.
The City of Enchantment’s property values increased by $313 million, or 13.25 percent.
“The economy was booming at the time and things were going well, real estate was doing great,” City Manager Bill Yenne said.
Lake Jackson had about $2.4 billion worth of property in 2019, according to the preliminary numbers from the appraisal district, and about $2.7 billion estimated for 2020.
City leaders need to know whether these values will stick after being certified, or if the appraisal district will adopt another option — like freezing at 2019 values — before the city can plan a property tax rate, Yenne said.
The new values would lead the city to setting the tax rate as low as 31 or 32 cents per $100 of property value, Yenne said, adding they usually set the tax rate at the no-new rate or about a half-cent above to have some benefit, but not much.
Because the tax rate is low compared to other Texas cities — Lake Jackson has the 12th lowest tax rate for cities with a population above 10,000 — with the new state law requiring an election if the tax rate increases more than 3.5 percent, the city would be in a tough position, Yenne said.
Building up from 32 cents would be much different than building up from about 34 cents, which the city could maintain if the values were frozen, he said.
“That becomes our base during some bad economic times,” Yenne said. “In the hard times like this, we do cut back. We’re cutting back like crazy.”
They would maintain the low tax rate if and when values are much lower in future years, like they did during the great recession when the tax rate was about 39 cents, he said. Even the 39-cent tax rate and low property values put a severe strain on city services, Yenne said.
The 3.5 percent limit would prohibit the city from raising the tax rate even a penny without an election, he said.
The city’s main struggle is the downturn in sales tax, which is Lake Jackson’s top revenue stream, Yenne said.
“I think we’re just all trying to figure out what the governor is going to do next,” Yenne said.
Finance Director and Assistant City Manager Stephanie Russell is not putting much stock into the preliminary appraisal increases for 2020.
“It’s too soon and we will see,” Russell said. “I proceed with caution until the real numbers come out.”
The city saw a more than 18 percent increase in its values from the certified amount last year, according to the Brazoria County Appraisal District.
“It’s estimated values at this point,” Russell said. “It gives us a ballpark but a lot can change.”
Freeport values were listed at $498.3 million in 2019 compared to the estimated $589.3 million this year, an increase of $91.1 million.
“I had no real expectation going into this,” Russell said. “It’s higher than I might have expected, but I didn’t really think about it too much. I don’t have the full breakdown.”
As its appraisal value increased by about 13.5 percent, Angleton’s residents are bound to protest some of the preliminary increases, should they occur, Interim City Manager Chris Whittaker said.
“I guess that we will probably, at the end of the day, not see all of that revenue,” Whittaker said.
Data from the county appraisal district shows that the value of Angleton in 2019 was about $1.04 billion, while preliminary data for this year places the value at about $1.18 billion.
The city is working on a homestead exemption plan, he said, that would help with any potential future tension. Council has yet to determine the rate of exemption.
“There are many exemptions already in place including exemptions for (Angleton) ISD, the drainage district, the veterans’ exemption and a senior exemption for the over 65 and disabled,” Whittaker said. “So the council wants to proceed with doing the homestead exemption, and that could be from 1 to 20 percent as the rate that you can give an exemption at.”
Property owners will be allowed to include one home in their exception, Whittaker said.
“Generally, anyone who is declared as a resident of Angleton and is a primary homeowner can file for this exemption,” Whittaker said.
Whittaker was told there are about 41,000 residents eligible for the exemption, he said.
“That would be at $20,810,000 and that’s the overall taxable value, and if you multiply that by our 2019 tax rate, that’s 0.69 percent and that would reduce the amount that the city gets by about $143,000,” Whittaker said. “The council wants to keep the tax rate the same as last year’s, not any higher, so we’ll see after a thorough evaluation just what we can do from there.”
COVID-19 is a part of the 2020 tax conversation, he said.
“I think it’ll be a unique conversation to have because it’s a different year with the challenge of the COVID-19 economic impact on primarily sales tax,” Whittaker said. “And the city is doing what they can to help with utility expenses for residents-in-need.”
The village’s preliminary appraisal increase from about $280 million in 2019 to about $328 million for 2020 — about a 17 percent increase — are perplexing to Alderman Jennie Green-Prats.
“I can’t give you any science as to how things have gone up,” Green-Prats said. “As I’ve seen, real estate sales haven’t gone up, and I also work as a real estate agent.”
The town experienced a more than 29 percent increase in preliminary appraisal values, from about $8 million in 2019 to about $11 million preliminary for 2020. Quintana officials could not be reached for comment.
Despite an almost 6 percent increase, Mayor Justin Mills did not put much stock into the preliminary city appraisal values.
“If you ask me about appraisals, I probably wouldn’t have a lot of nice things to say,” Mills said. “As a city, for them saying that our city is worth $10 trillion that just means I’m a bad (expletive) mayor but in reality, it’s all (expletive). It just looks good on paper.”
The preliminaries were valued at $186.7 million compared to the $176.3 million reported last year, according to the Brazoria County Appraisal District.
“When you are offered to bring your numbers down and it starts here and whether it’s greed or pushing your city to grow,” Mills said. “When you operate your budget and can roll back on your taxes to entice more people to come to our city because your taxes are low, that’s how you grow.”
Mills added an opportunity for a 17 percent tax decrease, which he pushed for last budget season, was a lost chance to grow the city and bring in more residents.