Tax Base in Dallas County Cities

Introduction

Last week we looked at historical changes in the tax rates of 25 cities that are all or primarily in Dallas County. This week we review changes in the tax bases of those cities since before the Great Recession. The cities included in this analysis are: Addison, Balch Springs, Carrollton, Cedar Hill, Cockrell Hill, Coppell, Dallas, DeSoto, Duncanville, Farmers Branch, Garland, Glenn Heights, Grand Prairie, Highland Park, Hutchins, Irving, Lancaster, Mesquite, Richardson, Rowlett, Sachse, Seagoville, Sunnyvale, University Park and Wilmer. These cities vary dramatically in size. Though all saw their tax base grow, their performance also varied. Much of the growth in recent years was making up for loses following the Great Recession.

Total Tax Base

These 25 cities had a total taxable value of over $238 billion in 2016. This was a $57.2 billion increase over 2007 when their combined tax base was $183.7 billion. That was the year before the financial crisis and the beginning of the Great Recession. That change represents a 32 percent increase.

These cities vary in size, with 2016 tax bases ranging from $93 million for the City of Cockrell Hill to almost $109 billion for the City of Dallas. The five largest cities account for 72 percent of the taxable value in 2016. It takes the 14 smallest city tax bases to account for 10 percent of the total taxable value.

Changes in Tax Base

There are three benchmarks that we can use to evaluate the changes in individual city tax base since 2007. First, the absolute change in total taxable value for the entire county was 32 percent. The larger cities have a major influence on this total change. Indeed, the average change for the five largest cities was also 32 percent.

The average of the changes for all 25 cities was 45 percent. The slowest growing city saw an increase of just 3 percent, in Mesquite. The fastest growing city, Wilmer, had an increase of 308 percent over the period.

A final comparative metric is the median change, which was 27 percent. This implies that half the cities saw their tax base grow faster, and half grew slower than 27 percent.

Figure 1 shows the 25 cities in order of their percentage increase. Most cities had growth rates below 50 percent. The 45 percent average is pulled up by the very high growth rates of several small cities.

Figure 1. Percent Growth in Tax Base for Cities in Dallas County

 

Figure 2 keeps the same order for the cities, but shows the absolute increase in tax base. Figure 2 puts into perspective that the City of Dallas, as by far the largest city, has contributed the most to the total increase. The City of Dallas accounted for 44 percent of the total growth of the 25 cities. Irving and Richardson saw the second and third largest tax absolute growth in tax base.

Figure 2. Absolute Growth in Tax Base for Cities in Dallas County

Decline and Recovery

Comparing the difference between 2007 and 2016 misses the important changes that happened annually after the economic downturn. During this interval, these communities actually experienced four years of declining tax base after the onset of the Great Recession. The tax base in the Dallas County portion of these cities fell an average of almost $5 billion each year between 2008 and 2011. This was followed by growth in tax base for the last five years. Forty percent of the growth in the last five years was simply making up for lost tax base from the Great Recession. The annual changes for the Dallas County portion of these cities is shown in Figure 3.

Figure 3. Total Change in Tax Base for Dallas County Cities

*Includes the Dallas County portion of the 25 cities. Small sections of several communities are located in surrounding counties.

Next week we will continue our examination of the property tax base and rates for our Dallas County cities.

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