Texas's Big Four Cities Are All Out of Money — and the Bill Lands on Your Appraisal

Start in Austin. Last week the City Council adopted a $6.6 billion budget and a property tax rate of 57.99 cents per $100 of taxable value — the city's highest in at least a decade. An Austin Current analysis puts the rate 31% above where it stood in 2017.^[1] Holding a home's taxable value constant at $400,000, that rate difference alone is worth about $550 a year in city taxes. And the city's general fund — the operating account for parks, social services, and public safety — has grown 55% over the same stretch, from roughly $970 million to $1.5 billion.

The vote was not unanimous. Mayor Kirk Watson and Council Member Marc Duchen opposed the budget, arguing the council should have shown restraint less than a year after voters rejected Proposition Q — a ballot measure that would have raised the city's rate roughly 20%. Instead, the council went to the maximum increase state law allows without an election. Per the Texas Tribune, the owner of an average Austin home will pay about $195 more per year in city property tax — a 7.4% bump — and about $285 more once fee increases are counted.^[2]

The four-city scoreboard

Austin's vote is one data point in a statewide pattern the Tribune's reporting lays out city by city:

Dallas City Manager Kimberly Bizor Tolbert called the situation "our new normal going forward." Rice University public-finance economist John Diamond was blunter: "I just don't see an out." Inflation is raising the cost of running a city, sales tax receipts have flattened with the economy, and — the part that matters for this audience — property values have stopped doing the budget's work.

Why flat values push rates up

This is the same truth-in-taxation mechanic we walked through in our Fort Worth analysis, now operating statewide. Under Tex. Tax Code Chapter 26, a city starts from the certified appraisal roll and works backward to a rate. When appraisals surge — as they did during the pandemic — a city can cut its rate and still collect more. Austin did exactly that. When the roll flattens or shrinks, the arithmetic runs in reverse: the same budget requires a higher rate, and the 3.5% voter-approval ceiling (the 2019 Senate Bill 2 limit) becomes the number every council budgets against.

San Antonio's roll has now fallen three years running. Fort Worth's came in lower than budget writers expected. Austin's has leveled off. That is why you are seeing rate increases across the board from cities that spent the last five years advertising rate cuts.

A city budget is a rate times a roll. The council owns the rate. The appraisal district assigns your slice of the roll — and that slice is the only number in the entire equation you have legal standing to contest, every year, at no risk to your current value.

The protest signal buried in both stories

Two details in these reports deserve more attention than they got.

First, from the Tribune: Fort Worth's budget hole grew larger than projected in part "because more homeowners protested their home values."^[2] That is a city budget office attributing a nine-figure shortfall, in part, to ordinary homeowners exercising a statutory right. Protests, at scale, move the roll.

Second, from the Austin Current — Council Member Duchen, describing his own constituents: "What people are doing is they're desperately filing protests to keep their home values lower so they can afford to stay here."^[1] Set aside the word "desperately." What he is describing is the system working as designed: when the rate side of the equation is maxed out, households manage the value side. In the Comptroller's most recent operations survey, Texans filed about 2.47 million protests in a single year, and roughly 47% of informal reviews ended with a reduction — before any hearing.

What the Legislature does next

Cities should not expect rescue from Austin — the Capitol, that is. Gov. Abbott has said he wants lawmakers to further restrict how much cities can raise property taxes without voter approval. Sen. Paul Bettencourt, who authored the 3.5% limit, dismissed cities' complaints: "If they have a project and they need voter approval, they can take it to the voters and ask." The Texas Public Policy Foundation's Jose Melendez told the Austin Current that a 2025 proposal to drop the ceiling from 3.5% to 2.5% for cities over 75,000 people could resurface in a future session.^[1]

Whichever way that fight goes, note what every version of it has in common: the Legislature regulates the rate side of the equation. Nothing on the table changes the value side — your appraisal, your protest rights under §41.41, and the equal-and-uniform standard of §41.43(b)(3) are untouched and fully in your hands.

What a homeowner should actually do with this news

1. Stop watching the rate headlines. You cannot protest a rate. Between elections, the rate is set in a council chamber. Rate coverage is context, not action.
2. Watch your appraisal notice instead. 2027 notices land around April. In a market where the taxing units themselves are budgeting around flat or falling values, an appraisal that went up — or stayed pinned to a 2023-2024 peak — is exactly the profile that wins reductions.
3. Run the comparison before you decide. The equal-and-uniform argument does not ask what your home would sell for. It asks whether your appraisal is out of line with comparable homes' appraisals. That is a data question with a data answer.
4. File even if the informal offer seems small. Nearly half of informal reviews end in a reduction, and a lower value this year is the baseline your homestead cap compounds from next year.

Our position

The squeeze documented in these two reports is structural, and every honest observer quoted in them says it is not going away — "our new normal," in Dallas's words. Cities will keep adopting the maximum rate the law allows, because the alternative is layoffs and library hours. The Legislature will keep tightening the rate cap, because that is politically rewarded. Between those two forces sits your appraised value — the one number in the system that belongs to you to contest. In a year when a city budget office publicly blames homeowner protests for part of its shortfall, the message to homeowners is not subtle: the mechanism works.