Are Austin property taxes actually high?
How does Austin compare to other Central Texas cities?
Any property owner in Austin knows they pay high property taxes, but in my experience, relatively few know why they pay high taxes.
Simply put, the biggest taxer by far in Austin is the school district. It collects about half of all of the property taxes. But of course, for every dollar AISD raises to fund its own expenses, it also must raise nearly another dollar to send to the state of Texas. Contrary to popular belief, "recapture" or "Robin Hood" is not necessary to fund public education in districts with low property values. It's simply a policy decision by state government to fund K-12 education through what is essentially a state property tax on the residents of Texas's major cities and suburbs.
Nevertheless, for as long as I've covered City Hall in Austin it has been common for people to blame city government for their tax bill. I suspect that is because city government is the most identifiable local political entity and its spending decisions receive far more coverage than that of the other taxing jurisdictions.
But two things can be true. Austinites could be paying up the wazoo to Greg Abbott and City Hall. Are they?
I would say the status quo in Austin is not particularly high compared to other municipalities in the region, especially considering that Austin, as the region's big city, simply has to deal with problems that bedroom communities like Cedar Park don't.
Comparing taxes between cities is tricky. The tax rate that a city levies is straightforward, but whether the rate actually leads to high taxes depends on property values, which of course can vary dramatically between cities. The city of Austin often reports what the tax is on a "median" homestead in the city, but many other cities don't appear to do that.
So what I did was imagine a young family looking for a three-bedroom house in the Austin area with a budget of $400,000. That is the max they'll spend, but they'll happily spend less if they can. So what do the different housing options throughout Central Texas offer in terms of taxes?
