Property Value Drop To Hit Government Budgets

By BJ Austin, KERA News

Dallas, TX – Dallas County Commissioners say they may have to raise taxes after three years of holding steady. KERA's BJ Austin says declining property values will mean millions in lost revenue.

Dallas County commissioners are facing a 56 million dollar budget shortfall, with few budget-cutting options left. Last year they cut ten percent across the board. The bad budget news is based on an expected 8 to 9 percent drop in property values countywide.

University of North Texas Public Administration Chair, Bob Bland says it's not just Dallas County. Cities and counties across Texas are struggling with declining property values as they consider their budgets for next year.

Bland: There's probably going to be a lot of pain that s going to be spread in a lot of places: homeowners in terms of property tax increases; governments in terms of reduced services.

Dr. Bland says school districts will get a double whammy - less local property tax revenue, coupled with limited or declining state funding for K-12.

John Baen, real estate professor at UNT, says Dallas-Fort Worth recorded 60 thousand home foreclosures in the past 12 months. And he says commercial real estate values are going to drop even more in the future because of the tight credit market.

Baen says even the Barnett Shale is not the hedge it once was against red ink in local government budgets.

Baen: They will reap benefits of taxable income from that, but it's also slowed down as a result of lower gas prices.

Dr. Bob Bland says public policy experts are talking about how to lower the expectation of citizens as the two major sources of government revenue - sales and property taxes - take a nosedive because of the recession.

Email BJ Austin