Council members want San Antonio to offer its citizens property tax relief

by Ben OlivoMarch 1, 2019
District 9 Councilman John Courage and District 10 Councilman Clayton Perry talk about the potential for a homestead tax exemption offered by the city during a press conference Friday morning at City Council chambers. BEN OLIVO | HERON

In an effort to offer relief to taxpayers, council members John Courage, Clayton Perry and Greg Brockhouse said Thursday morning they expect San Antonio will offer its citizens a general homestead tax exemption the next fiscal year, FY 2019-2020, which begins Oct. 1.

San Antonio is the only major Texas city that does not offer its citizens such a break, which allows homeowners to lower the taxable value of their property by a certain percentage, therefore lowering their tax burden.

Tax rates
The tax rates for the largest Texas cities for fiscal year 2018.
» Austin—0.44180
» San Antonio—0.55827
» Houston—0.58642
» Corpus Christi—0.60626
» El Paso—0.75966
» Dallas—0.78420
» Fort Worth—0.83500

The exemption only applies to the city portion of their property tax bill.

Last week, Courage and Perry submitted a Council Consideration Request (CCR), asking city officials to research the impact such an exemption would have on the city's budget.

"You hear a lot of talk about affordable housing," said Perry, who's been lobbying for a homestead exemption since he was elected to the council two years ago, "this is a component ... as being part of the affordable housing answer for San Antonians."

In the CCR, Perry and Courage cited the Mayor's Housing Policy Task Force report, which concluded that the cost of owning a home in San Antonio is rising faster than the area median income (AMI).

"Between 2005 and 2016, the median sales price of home(s) increased by an average of 4.7 percent per year while the city's AMI increased by an average of just 1.9 percent per year," the CCR said.

The Texas tax code gives taxing entities, such as the city of San Antonio, the ability to offer a homestead exemption of up to 20 percent of the property's appraised value.

The question is: Can San Antonio, which has the second lowest tax rate among the major Texas cities, afford it? Can it maintain the level of services it provides its citizens while bringing in less tax revenue?

At a press conference Thursday morning, Courage, Perry and Brockhouse said, simply, yes.

They pointed to a budget surplus the city has annually, which was $13.1 million at the end of the last fiscal year.

A 5 percent homestead exemption, which is the amount the council members think San Antonio should start with the upcoming fiscal year, would cost the city $10.8 million, according to city estimates. A 10 percent exemption would cost the city $21 million, and a 20 percent exemption $41 million. The goal, the council members said, is to raise the amount homeowners can lower their valuations to the max 20 percent in the next 3-5 years. About 55 percent of San Antonians own a home.

"We could have easily paid for that this last year," Perry said of the exemption.

For a home valued at $200,000, after the homestead kicks in, a homeowner would save $27.91 with a 1 percent exemption, $55.83 with a 5 percent exemption, $111.65 with a 10 percent exemption, and $223.31 with a 20 percent exemption, according to data provided by the council members.

Courage said the city, in its assessment, needs to factor in how policies at the state and federal level, such as President Trump's $1.5 trillion tax cut last year, impacts the funding San Antonio receives from them.

"How can we ensure that we maintain a service level that people expect, while at the same time creating more relief from taxation?," Courage said.

Perry said the relief needs to happen because the cost of owning a home in San Antonio is rising when one considers the rise in fees such as solid waste and environmental fees.

San Antonio currently offers a tax relief for disabled individuals and for people older than 65, whose taxes are frozen.

Other taxing entities—Bexar County, school districts, University Health System, San Antonio River Authority, etc.—offer these same limitations for the elderly or disabled.

The city must notify the state of its intention to offer a general homestead exemption by July 1.

Setting It Straight: Because of a reporting error, VIA Metropolitan Transit was incorrectly listed as an entity that collects property taxes. It collects sales taxes.

Contact Ben Olivo: 210-421-3932 | ben@saheron.com | @rbolivo on Twitter

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