Last week, the Beaumont City Council gave its unanimous approval to a $329.7 million budget and a new tax rate for fiscal year 2024, both of which will add financial pressure to already-strained family budgets.
Beginning Oct. 1, the new tax rate is $0.681485 per $100 of value, which represents a very minor decrease over the tax rate currently in effect ($0.695 per $100). The decision to set the tax rate at this level means that the average homeowner’s tax bill “will increase by 6.74%.” In dollar terms, a Beaumont homeowner can expect his or her city tax bill to grow from $1,142.32 this year to $1,219.33 next year.
The reason for the tax hike is that city officials did not lower the rate enough to compensate for rising property values. Local elected officials have discretion on where to set the rate—and when they refuse to reduce it properly, then tax bills grow.
For the city, the higher tax rate will, of course, produce a windfall. According to its 2023 Notice of Public Hearing on Tax Increase, the newly adopted could swell property tax revenue by as much as 15.57% in one year. That’s a big spike in money going to government.
For Beaumont residents, the coming tax increase is a burden to bear; but it won’t be an unfamiliar one. The city has a fairly extensive track record of over-taxing.
Consider that from 2013 to 2022, property taxes levied by the city rose from $43.4 million to $61.7 million, according to its most recently published Comprehensive Annual Financial Report (CAFR). That’s a 42% jump in its tax levy, which is notable given the shrinkage in the city’s population. The same CAFR which records the levy growth also shows that Beaumont’s population has fallen from 118,296 in 2013 to 112,556 in 2022, meaning that taxes were on the rise despite there being fewer people to shoulder the cost of city government.
It’s easy to look at these statistics and wonder what’s going on in Beaumont. Why aren’t residents there in revolt? Well, the answer may be partially rooted in recent events and, if so, it could have implications for every Texan.
Earlier this year, the 88th Texas Legislature put the final touches on a historic $18 billion tax relief package that will cut the average homeowner’s tax bill by roughly $1,300 per year. That’s an unprecedented amount of relief intended to help families cope with the twin scourges of inflation and Bidenomics. But this momentous occasion has also given opportunistic local governments, like the city of Beaumont, a chance to raise taxes without raising eyebrows.
Oftentimes, there are complications that come along with hiking taxes. Local elected officials must weather media scrutiny and public comment. They must appeal to their colleagues and get supermajority approval. And sometimes, they must win over voters at an election. But these hurdles diminish in an environment where the state is providing massive tax relief.
That is to say, a local politician will find it easier to sell a tax increase when its effect can be downplayed. “We need the extra revenue and taxpayers will still enjoy lots of tax relief,” they’ll claim.
Of course, that sort of argument is riddled with flaws. The most glaring of which is that the state didn’t lower taxes so that local governments could more easily raise taxes. The Legislature did so to ease the burden on struggling families.
Unfortunately, in places like Beaumont and elsewhere, that message doesn’t appear to have gotten through. These entities persist in their old, bad habits and are even aided in them by the historic tax cuts.
These developments show the weakness of the current policy environment and strongly suggest the need for big changes to protect current and future tax relief efforts.
It’s time to make it clear that tax cuts are for the taxpayers, not the tax spenders.