DALTX Real EstateDALTX Real EstateDALTX Real Estate
  • Home
  • Guest Post
  • Agents
  • Contact Us
  • About
  • Advertise With Us
Reading: Could the Dallas Real Estate Market Survive a 130 Percent Property Tax Increase?
Share
Font ResizerAa
DALTX Real EstateDALTX Real Estate
Font ResizerAa
  • Home
  • Guest Post
  • Agents
  • Contact Us
  • About
  • Advertise With Us
  • Home
  • Guest Post
  • Agents
  • Contact Us
  • About
  • Advertise With Us
Follow US
© DALTX. All Rights Reserved.
DALTX Real Estate > Uncategorized > Could the Dallas Real Estate Market Survive a 130 Percent Property Tax Increase?
Uncategorized

Could the Dallas Real Estate Market Survive a 130 Percent Property Tax Increase?

4 Min Read
SHARE

Sold-and-For-Sale-Signs

As if the doom and gloom from the almost-over election isn’t bad enough, the city of Dallas has an economic crisis brewing that will most likely mean higher property taxes in the future. How would that affect our local real estate market? I was speaking to a prominent agent last week about the sticker shock our property taxes give most transplants even with the lack of a state income tax.

“These California buyers are starting to look at our property taxes and think twice about our so-called affordable living,” she said.

Last Thursday, Mayor Mike Rawlings was in Austin, sitting before the Texas Pension Review Board. He was pretty doom and gloom over unfunded liabilities in the Dallas Police and Fire Pension Fund that have also send our bond rating down, making it more expensive for us to borrow money. The fund was, he says, ripped off by a “Bernie Madoff scheme” in which fund members guaranteed themselves 8- to 10-percent returns on their investments, then took the money and ran. Of course, the police elected their board members and city councilmen from years past sat on the board.

Now the pension board wants the city to cough up $1.1 Billion (with a “B”) to replenish the police fund.

If we do that, Mayor Rawlings says the city would have no choice but to increase its current property tax rate by 130 percent to cover the difference.

Pension plans across the country are facing similar issues. The biggest drag on the DP&FP relates to the DROP drain. What is DROP? It was a plan conceived in the 90’s (when Laura Miller was Mayor) that allows “cops and firefighters with more than 20 years of service to take their accrued pension benefits and stick them in an account that guarantees at least an 8 percent annual interest rate, and up to 10 percent.  The plan was conceived in the 1990s as a way to keep veterans from doing their 20 years and quitting.” What a sweet deal!

That target was more feasible when there were fewer DROP members and the fund was pulling in bigger returns. But the system, like many others, took a big hit when the markets came crashing down during the 2008 financial crisis. And DROP, which has also been touted as a recruiting tool, has become an albatross on the pension system. In January (2015), DROP accounted for 42 percent of the entire fund. A handful have been getting wealthy in their advanced ages. Pension officials also said in January (2015) that one person’s DROP account had more than $3 million in it. An additional 13 had more than $2 million. And 283 had more than $1 million.

So because of wild-brained ideas more than a decade ago, we stand to pay through the nose for real estate taxes that will naturally send buyers scurrying.

Would a 130% increase on property taxes in Dallas hurt real estate values? I got my tax bill last week, and am now trying to figure out where the money to pay it will come from.

GOP Sweeps Statewide Seats, But Democrats Snag Some Important Races
Happy Independence Day! Here are Our Favorite Dallas Fourth of July Fireworks Displays
Swoon-worthy: Houzz Lists Top 10 Design Trends For 2017
Cyber Monday Sale at Bernadette Schaeffler Collection
You Have 30 Minutes to Pay Your Dallas County Property Taxes
TAGGED:Dallas Police and Fire Pension FundDallas Property TaxesProperty Taxes
Share This Article
Facebook Email Copy Link Print
Previous Article Need an Election Day Distraction? Dallas Builders Association Hosts Candy For a Panel Discussion
Next Article Back to House Candy: Mediterranean Villa in Preston Hollow so Huge You Could Stowe Away… the Brady Bunch
Popular News
DFW Real Estate News

Ebby Halliday Companies Team Learns, Wins Awards at LeadingRE Conference

Tin Roof. Rusted. The Love Shack That Will Set You Back $2K
A Modern Tudor in Hollywood Heights? You Bet!
A Splurge And A Steal In Munger Place
Love Field Neighbors Launch Noise Mitigation Proposals at Environmental Commission Meeting 
about us

DaltxRealEstate.com is the largest real estate blog and the only one in North Texas.

Links

  • Privacy Policy
  • Terms of Service
  • Contact Us
  • Paid Guest Post Submission

Categories

  • Wednesday WTF
  • East Dallas
  • Monday Morning Millionaire
  • Upon Closer Inspection

Get Involved

  • Advertise With Us
  • Write for Us: Submit Guest Post

Find Us on Socials

© DALTX. All Rights Reserved.
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?