Over the past few years, property valuations in Williamson County have increased at a much faster rate than individual income growth. The catalyst for this phenomenon has been a combination of events, including: a migration of people to Central Texas from other parts of the United States, individuals fleeing the high tax burden of Travis County, and a Federal Reserve policy that has kept interest rates at near zero percent for eight years—which has inflated all real asset prices, including homes.
Consequently, as the property tax base has expanded, the budgets of most local government entities (including Williamson County) have grown at rates exceeding population growth and inflation over the past 15-20 years.
As a Certified Public Accountant (CPA) and Chartered Financial Analyst (CFA®), I am greatly concerned about this phenomenon, since home price appreciation cannot continue at its recent clip (in perpetuity) nor will interest rates remain at zero forever. When a reset in interest rates occurs, property values will likely decline and County Commissioners must be cognizant of this possibility.
To combat this phenomenon, I believe the Texas Legislature must take action to lower the cap on annual homestead price appreciation from the current 10% rate to a much lower rate, preferably around 5%. As County Commissioner, I will fight to hold the county's effective tax rate at or near its current level so that increasing property values do not consume an increasing amount of an individual's income. I would also support a homestead exemption; however, I realize that this is only a temporary solution since any initial tax savings would be quickly eliminated if home values continue to rise.