Seniors - Freeze Your Taxes!

Updated March 29^th, 2004

By Ron C. West

Foreword:  This article was originally written in 2002.  The issue of the tax freeze for seniors is now a choice in North Richland Hills in the 2004 elections for Mayor and City Council.  The outcome will be decided on May 15^th, 2004.  The incumbent council and Mayor have refused to put the freeze on the agenda even for discussion.  Notes on the 2004 election now follow this original article.           

The scenario is your future.  The year is 2012, and the location is right here in a northeast Tarrant county city.  You purchased a nice home back in 1978 when you were 35 years old and you struggled for the next 30 years to pay for it.  By age 65, it is yours free and clear...or is it?  Did you noticed that over the past 10 to 15 years your mortgage payments went up dramatically?  If your homeowner's insurance was paid through your mortgage company, they are a little to blame for the increases but not for the bulk of them. 

Fortunately, inflation has been kept in check but property values still seem to going up and up. Back when you bought your home in 1978, you paid $65,000 for it.  By 1997 it was on the tax rolls valued at $100,000 and by 2002 – just 10 short years ago it’s valuation was up to $150,000.  Now the year is 2012 and the valuation is $300,000.  In this mythical scenario our elected officials have claimed to be holding the line on taxes for the past 20 years at their rate of $.50 per $100 valuation.   In 1978 your property taxes were a meager $325 for our city.  By 1997 your city property taxes were up to $500.  By 2002, the taxes on your property were $750 and by the time you got it paid for, the 2012 city property taxes alone were $1180.  This is a 360% INCREASE in your city taxes alone over the 30 year life of your mortgage.  For folks that have retired on Social Security, this takes a real hunk out of their check because this example is only for the city and does not include the county, the school district and the various municipal utility tax districts.  Assuming that your city taxes are about ¼ of your property tax bill, your annual property tax bill when you get your house paid for will be about $400 PER MONTH on a house that you paid $65,000 for.

In our mythical example, our seniors do not have the protection of a freeze at age 65 so they have to sell their house and move into a much smaller place that they can afford.  Is this all mythical?  Unfortunately, the answer is NO.  The average rate of tax revenue increases in the real world for Northeast Texas and across our state is about 9% per year with ever more cries for more and more taxes.  Often these increases are accomplished by valuation increases with the local taxing authorities loudly proclaiming that they are “holding the rate”.  Obviously, the same rate on a higher valuation costs you more money each year.  You also hear a lot about “sales tax shortfalls” , “citizens demands for improvements”, “the teachers are underpaid”,  “the police are underpaid”,  “the firemen are underpaid” and so on and on.  If you think taxes are bad today – just wait awhile.  Each tax increase enacted by our local taxing authorities is compounded in the same way that savings are compounded – if you have any left!

Current state law does provide for seniors to have the amount of school tax that they pay frozen when they reach age 65.  From age 65, the appraisal districts continue to raise their property values and the school board can continue to raise the rates.  These numbers will show in the valuation data and the difference between what the senior is paying and what someone under 65 would pay shows up as “lost revenue” for the taxing authorities.  Guess how much interest they have in older folks keeping their homes?

School boards can safely assume most people over 65 don’t have kids in school so if the other taxing authorities continually raise their taxes, so much the better.  Maybe they will sell out and allow a new taxpayer to pay all taxes at the higher valuations.

I believe our seniors need a break.  I am looking forward to the first city council that passes a freeze for seniors in their city.  That will be a better place to live.  In like manner, the county and other taxing authorities owe some deference to our seniors.  It is tragic that our society has become so money grubbing that it wants to gouge the people who have spent their lives building our communities and our country.  Most seniors want to retire at or near 65 but many are forced to continue working just to pay property taxes on homes they have paid for.  Other taxes and “fees” are also taking an ever-increasing portion of their income – especially if they are on a fixed income base.

The necessary change is simple.  Everyone – seniors and those under 65 – should demand that our elected officials immediately freeze all taxes for seniors at the current level or at the level at which they exist when the senior reaches the magic age of 65.  This can be accomplished if the seniors decide they really want it.  It starts with your local city council members.  If each senior constituent in the local council’s area would make one simple phone call to their council people telling them they want them to freeze the property taxes for seniors, I believe the various councils would do so almost immediately.   It would not hurt to let them know that if they do not pass the freeze, you will support someone who will in the next election.  (Be sure to ask the candidates before elections if they will support the freeze.)

Only because the seniors have not utilized their voting power has this been ignored.  Virtually every city in Northeast Texas has enough senior voters to elect a complete slate of council members who are friendly to their causes.  Very few people vote in the local elections and a single block vote the size of the seniors, endorsing candidates that support the freeze would ensure its passage. 

For a few minutes of your time making the suggested calls, you can reap big long-term rewards by getting the freeze into place.  I think freezing property taxes for our seniors will be a big step towards making these the golden years for our seniors rather than the work to pay tax years.

Update:  March 2004

The following was copied intact from Mayor Trevino’s website setup for his re-election campaign:

Senior Tax Freeze

I believe that it would be in the best interest of North Richland Hills to wait on any discussion of a tax freeze for any specific group of citizens until the impact from a couple of issues in Austin are studied. There is an eminent special session of the Legislature to discuss School Finance Reform as well as Governor Perry talking about revamping the property tax structure. It seems prudent to wait for the outcome of this special session so that we understand the property tax changes and the impact these may have on the our city so that North Richland Hills can continue to perform and function without impacting the ability to serve the citizens of North Richland Hills.

This appears to be based on input from a lobby group that is paid by the city to help them raise money from any source possible.  To translate, the Mayor is afraid that the legislature of Texas will in some manner inhibit the cities ability to continue their pattern of tax increases.  Over the past 10 years, NRH has increased property tax collections by 95% while population has grown only 19.6%.  In other words, under Mr. Trevino, he wants the citizens to continue to endorse taxes growing at a rate over 300% faster than the rate of population growth.  Elsewhere in his website is his restatement of his intent to – at the minimum – hold the same tax rate that is yielding this very significant increase in taxes to the city.  If the Mayor and his friends are re-elected, the Senior Citizens of NRH stand virtually no chance of getting the tax freeze – ever!

Note also that this false concern is not considered when issuing new debt for the city.  The Mayor and two City Council Members are planning a trip to NYC in early April to promote the sale of approximately $5 Million in new bonds for the city.  If there is a real concern about future income, wouldn’t it affect the cities ability to pay back the debt they are now incurring?