Dallas County Makes Big Error on Property Tax Estimates, Leading to $13M Shortfall

Dallas County made a major error in estimating its property tax revenue and is now $13 million short of what county leaders expected to have to pay the bills. The shortfall vanishes what was expected to be an easy budgeting year for the county -- and will likely end any hopes for property tax relief. "It's going to be tough unless we make the cuts necessary to replace that revenue," said Commissioner Mike Cantrell, the court's sole Republican. "I don't think the taxpayers should have to bear that burden." The error, which was discovered last week, came during last year's budget process to allocate expenditures in the $513 million general fund, said Ryan Brown, the county's budget director. The auditor's office miscalculated the amount of property value that would not be subject to tax because certain properties had already reached the 10-percent cap on annual tax increases. The faulty calculation relied on a formula from 2015, when the value of properties that were capped for tax increases totaled $6 billion, Brown said. But last year, that figure was actually $13 billion, Brown said. Cantrell, Brown and Commissioner John Wiley Price said they envision cuts to truancy courts, other courts, the juvenile department and the county clerk's office. "This is the end of the rodeo," Price said. "This is the year to right the budget." Last year, nearly all county employees received 8 percent raises -- an amount that was based on the windfall into county coffers from rising property values. After realizing the error that had been made, Brown said the staffers should have actually received 6 percent raises. To pay its expenses, Brown said, the county has used some of its reserves, but it still has plenty left over. However, if commissioners do seek to cut the tax rate, that could mean layoffs next year, he said. Jenkins, who didn't respond to requests for comment Monday, has said he wants to cut the tax rate to what's called the effective tax rate, meaning the rate at which the county would receive the same total property tax revenue, not counting taxes on new construction. "We could literally, if we're not careful, price people out of being able to live near their jobs," Jenkins said. The effective rate would be roughly 23.2 cents per $100 valuation -- slightly lower than the current tax rate of 24.31 cents per $100 valuation. For instance, a homeowner with a $250,000 house would pay $580 instead of $607.75. However, homeowners could still see a rise in their property tax bill if their value increases. Meanwhile, the county would still receive $13.5 million in new revenue due to new construction. Price has dismissed Jenkins' effort to lower the tax rate as a politically motivated move that would hurt the county. Jenkins is running for reelection next year. Cantrell said he would still push to make enough cuts in county spending to be able to lower the tax rate.Officials will discuss the issue at Commissioners Court on Tuesday.  Continue reading...