The Actual Truth About Bill White And Houston Property Taxes

The Actual Truth About Bill White And Houston Property Taxes
By: Bob Lemer

Former Houston mayor Bill White wants Texas voters to focus on Houston’s property tax experiences on his watch and his stewardship of the City’s finances. Fair enough.

First, let’s see what Bill White says, and then I will give you the actual truth.

Bill White says he cut Houston property tax rates. Yes, Bill White did cut Houston’s annual property tax rate in several years (by miniscule amounts) during his reign as Houston mayor during calendar years 2004-2009, obviously for later bragging rights when running for higher office.

What he doesn’t tell you is that, even with the miniscule cuts in the property tax rate, the City’s total property tax revenues established a new record high every fiscal year (ended June 30) that he was in office, due to dramatically increased property assessed values, considerably more so than due to new properties added to the rolls.

Bill White says he “balanced the budget” every year and increased each year-end general fund balance. Yes, Bill White did “balance the budget” each year (as required by law) and increased the general fund balance the first five of the six fiscal years under his watch.

But he did so solely by supplementing general fund revenues with the proceeds from property-tax-supported pension bonds, which are backend-loaded, thereby having to be paid off by future generations.

So Bill White’s claims are disingenuous, at best.

But here are the startling truths about Bill White and Houston property taxes
that he really doesn’t want you to know!

1. Even with record revenues from property taxes (and sales taxes) during every fiscal year (2004-2009) ended under mayor Bill White, the City of Houston’s annual expenses exceeded its revenues by $1.7 BILLION, in total. And $1.5 BILLION of the excess of expenses occurred by fiscal year end June 30, 2008, BEFORE the recession. This is so according to the City’s independently audited annual financial statements.

2. Bill White refused to have the City of Houston abide by the property tax law he himself tricked a fawning city council and a deliberately misinformed voting public into approving. White got city council to place Proposition 1 on the November 2004 ballot, and the voters approved it. Prop 1 was represented as placing an annual cap (lower of (a) per cent increase in population plus inflation or (b) 4.5%) on the City’s total property tax revenues. The voters were told that they would have to approve any total property tax revenues in excess of the Prop 1 cap.

However, when Prop 1 became effective, commencing with fiscal year 2006, the City began exceeding the Prop 1 cap every year. But mayor White refused to refund any annual excesses.

His reason? Prop 1 supposedly placed a cap on BUDGETED total property tax revenues, even though the ballot language said nothing about budgeted revenues and neither did public discourse on the measure.

Guess what. Commencing with the initially effective fiscal year (2006), the City suddenly started significantly under budgeting total property tax revenues. Prior to fiscal year 2006, the City was budgeting within 1% (both over and under) of what ended up as actual total property tax revenues every year (because of the timing of approval of the tax roll and rate approval).

3. When mayor Bill White took office in January 2004, his home was being taxed at an assessed value of $1,351,900, ONLY 48.2% of the $2,803, 200 fair market value (FMV) assigned to his home by the Harris County Appraisal District (HCAD).

When Bill White left office six years later, his taxable assessed value had increased 10% per year to where it finally caught up with the HCAD assigned FMV. But that was possible only because HCAD had LOWERED HIS FMV to $1,961,704 at January 1, 2007 and then slightly increased it to $2,120,195 at January 1, 2008.

HCAD lowered the FMV because White’s property supposedly could be prone to flooding over time. HCAD stated that White did not request the reduction in value.

White’s supposedly unsought largesse from HCAD should be of extreme interest to the large number of Houstonians who had to go through exhaustive HCAD appeals, sometimes presenting pictures of water standing in their homes.

The HCAD assigned FMV of Bill White’s residence has remained at $2,120,195 for the last three annual tax rolls, unlike the experiences of most Houstonians.

4. Before Bill White won the Houston mayoral election in November 2003, he was the CEO of the Wedge Group, the owner of the office tower at 1415 Louisiana in Houston. He also was the Greater Houston Partnership’s liaison to the City, regarding the City’s finances.

Therefore, it is very interesting to observe the assessed taxable value (in millions of dollars) of the 1415 Louisiana office tower on the following January 1 tax rolls:

2001 $38.1
2005 $24.8
2008 $44.2
2002 $35.9
2006 $30.7
2009 $39.3
2003 $30.2
2007 $38.5
2010 $34.3
2004 $24.4

I am sure Houstonians are not pleased when comparing the Wedge Group’s assessment track record to their own City property tax experiences during the same period.

5. Before Bill White ran for mayor, he chaired a Greater Houston Partnership committee assigned to look at the City’s property tax supported debt. A Houston Chronicle editorial quoted White as saying at that time that the City’s level of tax-supported debt would not be tolerated in the private sector.

So what did White do after becoming mayor? He increased the property tax supported debt by 50%. Houston’s debt per capita now significantly surpasses that of the essentially bankrupt state of California.

So there you have it, the actual truth about Bill White and Houston property taxes.

Bill White and several Texas newspapers are clamoring for a debate. I am available any time White wishes to defend his record while mayor of Houston. But that debate will never happen, even though White is a highly experienced trial lawyer. For he knows he would be overmatched in that I have the numbers, including his.

Bob Lemer is a retired partner of a Big Four accounting firm. He has researched and written for over a quarter-century on the finances and operations of governments from the Houston local level to the state of Texas and federal levels. He may be reached at boblemer@sbcglobal.net.