The Blame for Taxes

To the Editor:

Judge Ed Janecka was right in his June 30 letter to the editor, our local tax assessor is not to blame for the exorbitant valuations we received this year. They are just following orders handed down to them from the State Comptroller’s office. There have been numerous times throughout history where government employees committed crimes against its citizenry because they were just following orders but I digress, back to the topic at hand.

As Judge Ed stated, the state performs a School District Property Value Study (SDPVS) every two years to generate real property values for determining how much state funding each student in every school district receives. The goal of the SDPVS is for each student in Texas to receive the same amount of funding between local and state taxes. If properties are undervalued, then school districts will receive more than their fair share of state taxes which defeats the whole purpose of this equitable education system they have attempted to create.

The most recent SDPVS for Fayette County was performed from February 2022 to February 2023. At the beginning of the study, average interest rates were around 3.75% and the real estate market was very strong. But as the Federal Reserve continued to raise rates, the market began to slow and by summertime it had become stagnant. By the end of the study, average interest rates had climbed to around 6.25%. For every 1% increase to the interest rate, the monthly payment and total cost of a home loan rises around 10%. A home purchased in February 2023 would cost about 35% more monthly and overall than if it were purchased at the same price a year earlier.

The major problem with the SDPVS is that it does not account for interest rates when determining the valuations of our homes. The assessed values we’re seeing for 2024 are what our homes could have sold for at the height of the market boom in 2022 and do not realistically reflect what we could sell them for today. There are other issues that need to be addressed as well, but adjusting the SDPVS formula to account for interest rates would generate more realistic valuations and lower taxes for Fayette County citizens.