East Texas

By ROY MAYNARD, MEGAN MIDDLETON and CINDY MALLETTE
Staff Writers

Newly released certified appraisal rolls show that Smith County’s taxable values rose 6.7 percent for 2008, with varying gains for area cities, school districts and other taxing entities — but the increase isn’t as sharp as in recent years.

The increases in appraised values mean the taxing entities will have more money to work with, even if their tax rates stay the same.

Values in Smith County rose from $12.54 billion in 2007 to $13.38 billion for 2008. The average home price in the county rose from $126,719 to $131,899, an increase of 4 percent.

New construction is also helping the county’s tax base, with $424.6 million in new property on the rolls.

“Now that we have figures, we’ll have a much better handle on where we need to go with our budget and what we need to do in the next few weeks,” Commissioner Bill McGinnis said.

The rate of growth is lower than last year’s 9.7 percent increase and 2006’s 11.6 percent jump, the Smith County Appraisal District reports.

“But I don’t think we’re seeing a slowdown,” said Chief Appraiser Mike Barnett. “Overall, the growth in oil and gas was nominal, but we continued to see significant growth in the real estate and the business personal property values. We also had a significant adjustment in losing the Goodyear plant, which was about an $18 million reduction.”

The city of Tyler’s appraised values grew, but not as much as in years past. The values went from $6.14 billion in 2007 to $6.56 billion in 2008, an increase of 6.8 percent. Between 2006 and 2006, however, the growth was in the double digits at 11.6 percent.

The growth is a good sign, but it does pose a problem for the city’s budget, said Mark McDaniel, city manager designate.

“This is certainly modest, when we compare it to what we’ve seen in the past two years,” he said. “The last two years were record growth for us, in fact, but now we’re back to much more modest growth, so that does put a little pressure on our tax rate.”

McDaniel said the city anticipated very conservative growth when it began its budget process, and has asked city departments to tighten their belts as a result.

“It’s a tough budget,” he said. “With the high cost of fuel and salary adjustments from last year, all that combined, and there’s a lot of pressure on the departments to cut back.”

The lower growth rate isn’t necessarily a sign of economic trouble for the city, he added.

“It’s more of a stabilization of existing values and not as much new construction,” he said. “The good news is that we’re not seeing the number of foreclosures as the Metroplex and others are seeing. I think Tyler’s very fortunate to have the economy it does, one that’s more stable.”

The average appraised home value in the city of Tyler went from $141,921 to $148,172, an increase of 4.4 percent.

Tyler ISD has a 2008 taxable values total of $7.53 billion, up 6.3 percent from last year’s $6.92 billion.

The district will see the full benefit of the values increase on the debt side (I&S) of its tax rate, said Tosha Bjork, director of financial services for TISD. That means TISD can continue to pay down more on its debt and save money on future interest expense on outstanding debt.

But there is not as much of an effect to the school district’s maintenance and operations (M&O) side, except for the eight pennies of “enrichment” above its compressed rate of 95 cents per $100 valuation. The district will see the benefit of the values increase on those eight cents.

“Two years ago, under normal circumstances, this would have been a great thing for us, but now it’s really not. It doesn’t really help us,” Ms. Bjork said, adding, though, “It might help us about $250,000 worth in the general fund.” That represents the values increase on those eight pennies.

Before the changes to school finance, the district might have seen an increase in revenue of about $2.5 million from such a property value increase.

“We’re collecting the money, so it’s still a burden on the taxpayer, but we get less state funding,” Ms. Bjork said. “We’re still going to collect every dime of it, but we don’t get the benefit of it. The state reduces what they send us by whatever we collect extra. The only reason we get more money is if our number of students goes up — on the M&O side.”

The Winona Independent School District saw the county’s biggest jump in taxable values, with a 14.9 percent increase, from $318.72 million in 2007 to $366.14 million for 2008.

“We had a number of commercial developments completed in Winona,” Barnett said. “Those items added up and added to their tax base. Also, their oil and gas went up from $57 million to $81 million.”

But much of that growth has taken place outside the Winona city limits, with the result that the city of Winona saw just a 1.4 percent increase, from last year’s $14.55 million in taxable values to this year’s $14.76 million.

The cities of Troup and Bullard saw hefty increases in their taxable values. Troup had an increase of 13.5 percent in the portion of it within Smith County. Bullard had an increase of 11.6 percent.

“Also, there was quite a bit of new construction in Lindale, adding to the base there by 8.9 percent,” Barnett reports.

And the Arp Independent School District fared better than expected.

Initially, we thought the values for Arp ISD would be down some, but we had some additional oil lease and gas well completions come in, so they’re up slightly over last year, about 1.9 percent,” Barnett says.

County officials are now calculating the effective and rollback tax rates for the area’s taxing entities. Those numbers should be released later this week.