By Bill King
AframNews
https://aframnews.com/
Per the recently released City of Houston audit, the City’s contribution of property tax revenue to the TIRZs exceeded $200 million. That is the bad news. The good news is that the contribution was slightly lower than last year ($203MM → $201MM).
The City has increased its contributions to the TIRZs by nearly 50% since 2018. However, the other taxing entities participating in the TIRZs have steadily reduced their contributions.
I think there are two takeaways from these trends.
First, the theory that the TIRZs are generating property tax values faster than the rest of the City, thus justifying their receiving preferential revenue, is breaking down. If the value of properties in the TIRZs were perpetually increasing faster than the City generally, then their increment should be steadily increasing. Many of the properties in the TIRZs are office buildings, whose value is under severe stress, and I suspect they will likely continue to drive TIRZ revenues down.
Second, it is interesting that taxing entities other than the City have been steadily reducing their par- ticipation. There are likely two reasons for that. First, they see no benefit from their participation. Second, and probably more importantly, their taxpayers have not imposed a property tax revenue limitation, so they have no motivation to create a subterfuge to duck the taxpayers’ wishes.
Ironically, if the values in the TIRZs begin growing more slowly than the rest of the City, it will actually make the restrictions of the property tax cap more severe. Won’t that be poetic justice!
