Changes Coming to AISD Historic Tax Exemptions
If you live in Austin, the biggest portion of your property tax bill goes to the school district. But owners of some historic properties can get up to half of that bill waived.
A few years ago, that prompted allegations that people were abusing the system. Now the school board is considering whether to implement some big changes to the historic tax exemptions program.
Jane Hayman walks through the affluent Austin neighborhood of Pemberton Heights. She points out houses that are considered historically significant enough to have received partial tax exemptions.
“A 1961 house. Was that house in danger of being torn down? Defaced? Demolished? No. But they’re getting this legal tax break. That house is worth about a million dollars,” Hayman said.
Hayman is not happy with the historic tax abatement program. She thinks a lot of homes receiving exemptions don’t deserve them.
“I have a strong need to see fairness. And that’s essentially what it is” Hayman said, “there is some part of this, some huge part that is just not fair.”
Almost all the local property tax jurisdictions offer some kind of partial tax exemption for historic properties. Austin ISD suspended its program for a year in 2010. That was partly because concerns about the growing number of properties receiving tax abatements and the fact that many of them were located in wealthy West Austin neighborhoods like Pemberton Heights. But Jacqui Shraad with the Heritage Society of Austin says those problems have been fixed in the city’s program. And she says the abatements help preserve the historic character of the city and raise property values in neighborhoods, which in turn helps increase tax revenues.
“It’s great for property values, tourism. They get an annual inspection by the city, and maintaining a historic property is very expensive,” Shraad said, “you can’t just go to Home Depot and pick out some siding. Everything has to be replaced with authentic materials, so it’s very expensive to keep them up.”
Austin ISD staff are recommending the school board adopt the same modified version of the historic tax abatement program adopted by the city. Among the changes, it is now harder to be designated as historic landmark. And under the AISD revisions, any homeowners who qualify after 2011 would have their tax credits capped at $3,500.
If AISD adopts the program, it would collect about $2 million less in property taxes. But because of how the state’s school finance system works, AISD chief financial officer Nicole Conley Abram says three quarters of that money would be sent back to the state anyway under the Robin Hood rule. That’s the mechanism that sends revenue from wealthier districts to poorer ones.
“So for us, we’d rather maintain that $1.6 million of economic activity here in Austin, as opposed to just sending that to the state under the financing system to send to other school districts under recapture,” Abram said.
The Austin ISD board is scheduled to vote on the historic tax abatement program on Monday, June 18th.