Dallas Morning News reported in early March  the City Manager “has not decided whether to ask the City Council to approve a property tax increase to pad a steep decline in sales tax revenues and expected property tax receipts.”

It should come as no surprise that property tax rates are likely to rise, given the shortfall in sales tax receipts.  The problem is not limited to Dallas; it’s statewide.

In January the Texas Comptroller’s office reported December sales tax collections down 11.6 percent compared to the same period last year.  It was the eleventh straight month of declines statewide (since February 2009).

Sales tax revenues provide $44 billion, or 57 percent, of state tax revenue and about a quarter of the overall funding of state government.

The effect on your property tax rates is imminent.

“Several City Council members,” the Dallas News article continued, “are openly discussing raising property taxes, and more are likely to come aboard if budget news continues to be grim.”

Owners have only one effective recourse and that is to protest the appraisal value of their property to their local Appraisal Review Board starting in May.  At Property Tax Protest we believe the declining property market gives every owner reason to protest this year — and the apparent budding recovery in home values at the end of 2009 and first quarter of 2010 makes this an even more significant time to get your residential and commercial values in line with the market.

Waiting until 2011 may be too late.  Down markets are transitory but property tax increases are usually permanent.