We start our morning with so much amusement that I don't know quite where to turn.
Last night, as I was driving home from my class, I had a text message from Wolfram, asking me to join him at the Mining Company. My gut reaction was to just delete the message, but I foolishly replied with something to the effect of "what the .. ?"
After spending some time with Tom, I toddled over to meet .. Wolfram. And Babs. And CHUCK?! Wolfram was .. well, mugging on Chuck, who was excited to see me. I was NOT excited to see Wolfram, but was very happy to see Babs and Chuck. It was just weird. I left shortly after 11:30, and headed home.
Also, I had a conversation last night with someone who doesn't understand the way that taxes are collected - the assertion was made that the high property taxes in Texas were the cause of the $8.2Billion surplus currently enjoyed by the State.
So, everyone - please pay close attention - here we go (this is only valid for residents of the State of Texas - if you live somewhere else, you should skip this part)
In Texas, we pay the following taxes:
Property taxes
Sales taxes
Gasoline tax
User fees
Business Franchise Tax
Occupation Tax
Oil & Gas Severance tax
We'll start with the easy ones:
Oil & Gas Severance taxes are charged to oil/gas producers for raw product that they extract from the ground that's in Texas, including the offshore area. It's based on the market price, this tax. For nearly eighty years, this tax alone carried the weight of government services in this state, and provided cheap college education and low personal tax burdens. Once the oil in Texas wells began to run low and production shifted elsewhere (approximately 1978) this tax had to be replaced by other taxes. This tax is assessed and collected by the State of Texas, and goes into general revenue, although a significant portion goes to the permanent education fund, which is shared by the University of Texas (Austin only, Texas A&M (College Station only,) and to a lesser degree, Texas Tech and University of Houston.
Occupation tax - this is a tax that was created in about 1989 to increase cash flow to the State of Texas. A number of occupations are "taxed," with an annual renewal fee, including lawyers. The attorney occupation tax is $200/year. This tax is assessed and collected by the State of Texas, and goes into general revenue.
Business Franchise Tax - a tax that has been with us for a very long time, this is a tax on business "capital" - retained earnings over expenses. This tax is quite low, and only applies to companies that have more than $150,000 in taxable income or capital annually. This tax is collected by the State of Texas, and goes into general revenue.
User fees - these are not direct taxes, but are collected by local and state governments to support delivery of services, most of which used to be free. When you change your address with the DPS, a $10 fee is collected. If you order a certified copy of a document, you pay a fee to the county clerk. These user fees are CAPPED by the State of Texas, not set nor collected by the State of Texas, unless it's a Texas state agency charging the fee. In either event, some portion of the user fee goes to support the agency collecting the fee, and some part goes to general revenue for the agency/county/state. Lately, the State of Texas has whalloped its citizens with "add on" user fees, if you're arrested for DWI - the DPS now assesses you a $1000/year fee to keep your driver license for three years. If you get a speeding ticket, you pay your fine to the local government that issued the ticket, AND you pay the State a fee for unsafe driving.
Gasoline tax - when you drive your Expedition up to the pump and drain $75 worth of unleaded into your tank, a portion of the $3.00 that you pay per gallon is STATE gasoline tax. Texas has one of the lowest fuel taxes in the nation, but this is a State tax, and goes into the general revenue fund.
Sales tax - for years, Texas had no sales tax (our meager services were paid for by the oil & gas severance tax) but, starting in the 1960s a sales tax was gradually added into the mix. Currently, the State of Texas charges 6.25% of everything you purchase (except automobiles, which are taxed at 6.25% of the first $1500 and then at $6.00 of the balance) except for food and some services. Watch out, though, as they're looking to start collecting sales tax on everything from legal services to medical services. Your city, county and transit authority can, by local vote, add to this sales tax. In Houston, we pay 1% to the city and 1% to Metro. In Pasadena (Texas,) they pay the same net sales tax, 8.25%, but it is broken down differently. The sales taxes are collected by the State of Texas, and those parts collected on behalf of the city, county or transit authority are distributed by the state to those local jurisdictions. The money is deposited into general revenue. This is a partially state and partially local tax.
Property tax - if you own property, you are taxed by the city, county, school district and whatever other local taxing authority smacks down a levy on property values. These taxes are set LOCALLY, and are capped by the State of Texas. Capped means that the State tells the local governments that one cannot be charged more than a certain percentage of one's property values.
In the City of Houston, the average taxpayer pays property tax to:
Harris County
City of Houston
[Houston] Independent School District
Harris County Hospital District
Houston Port Authority
Houston Community College District
If you're lucky enough to live outside of City water and sewer services, you pay a Municipal Utility District (MUD) tax.
These tax rates are SET and ASSESSED by the local government that collects them. The property values are set county wide by an independent agency called the appraisal district.
The appraisal districts track market values in the county, and then issue an annual statement of what one's property is worth. This sets the taxable valuation, on which the local tax rate is applied.
The only control a local homeowner has over their tax assessment is to contest the property tax valuation issued by the appraisal district. Otherwise, everyone pays the SAME rate, unless they're disabled, over 65 or meet other exemption criterion. Agricultural land, if in use, is generally exempt from tax. In the City of Houston (and Houston ISD) the approximate tax rate is 3.10% of one's assessed valuation. Therefore, if one owns a property that's assesed at $100,000 in value, one will be paying approximately $3100 in property tax, spread out over all of the taxing authorities.
NONE OF THIS MONEY IS COLLECTED BY THE STATE OF TEXAS. This money is assessed locally, collected locally, and goes to support the operations and services provided by local government.
In fact, the State of Texas cannot interfere with local property tax collections.
All of the statewide discussion about reducing property taxes revolves around the State's oversight of EDUCATION; they can dictate how much property tax the school districts assess.
None of it has a whit to do with how much you're paying your school district locally; it all has to do with spin and state politics. The State Supreme court has held that the State's system of financing education was unconstitutional because a child in a school district with high property values is funded at a much higher level than is a child in a rural school district with low property values.
So, the State of Texas, which has been aware that it had to revamp its system of public school financing, has been passing the buck for years and is now up against the wall. They have to create a new and approvable structure by the summer, or the Supremes (of Texas) have indicated a willingness to shut down public schools entirely.
Those elected officials in Texas, looking to create a statewide system of collecting and distributing money to support public education (required under the Supreme Court's order) are trying to sell this "new" tax by calling for a reduction in the tax RATE assessed by local districts. They can't change the rate that the districts charge, so they're talking about capping valuation.
And, I can promise you, they'll institute a new tax and nothing will substantially change about local property taxes.
If you're upset about your property tax rates, blame the general increase in property valuation - the RATE hasn't changed in years and years, except by the barest of fractions.
And, get very clear, the taxes collected to support local schools are NOT held by, managed by, collected by or ever touched by the State of Texas. Anything you've heard to the contrary is ignorant, inflammatory and uninformed.
What else were we going to talk about today?
Another busy weekend, revolving around church business and activities. The pool is yet green, and Mitch's ongoing promises to get it (and anything else) handled are just so much excelsior.
Ruby's loaded down with stuff for the church garage sale. She rides dreadfully. I'm glad that she'll be unloaded in a few hours.
No comments:
Post a Comment