The Gregg Appraisal District this month delivered a mixed bag of certified property values to local taxing entities.
“You’ll see every jurisdiction lost value in minerals,” Chief Appraiser Libby Neely said. “Those that lost the greater amount are the ones with more active wells.”
Certified property values factor heavily into the budget process that area cities, counties and schools are working on for the coming budget year.
While the novel coronavirus pandemic has widely affected sales tax revenues — another source of revenue for cities and counties — Neely said the drop in mineral values occurred because of conditions before that. Oil prices were driven down by a feud between Russia, Saudi Arabia and others as they raised oil output even as demand declined because of the pandemic.
Appraisal of mineral values were affected by that dispute, Neely said.
The city of Easton was hardest hit in Gregg County, according to the figures she provided, with total appraised values dropping about 38%, from about $63.1 million in 2019 to almost $38.8 million this year.
That’s pretty close to the increase that had occurred for Easton between 2018 and 2019. There were new wells in Easton in the 2019 values, Neely said, as well as Longview ISD. The loss in value of those wells is reflected in this year’s values.
“Those new wells were producing very well. They were about at the height of their value last year,” Neely said.
Other jurisdictions have “old mineral values,” on their tax rolls. The swing in prices hurt them, too, Neely said, including places such as Clarksville City, where the total certified value dropped from $62.7 million a year ago to $56.5 million this year, and Gladewater ISD, which saw a total property value decrease of about $4.1 million. Both decreases were driven by mineral values.
Other local entities were affected by drops in values on the personal property side of the total taxable value, for equipment and inventory for oil and gas industry-related businesses, for instance.
“Kilgore took a pretty good hit,” Neely said.
Kilgore’s certified values dropped from about $1.12 billion in 2019 to $1.09 billion this year, with decreases in personal property/utilities as well as mineral values.
Gregg County and the city of Longview both saw total certified values increase, but Gregg County Judge Bill Stoudt and Longview City Manager Keith Bonds said both entities still would have deficit budgets in the coming year, which means they would draw from their fund balances to balance the budget.
Stoudt said he had thought total values would be higher because of “all the building” that has been taking place. Values used to fund the county’s general fund operations grew from about $9.27 billion in 2019 to $9.33 billion this year.
Stoudt said the county’s budget proposal calls for leaving the tax rate at 26.25 cents per $100 valuation, including the road and bridge tax rate. The county’s total appraised values grew by less than 1%, to about $9.33 billion on the general fund side.
“We’ll just deal with it. We can’t cut expenses enough to make up the difference, and, fortunately, we have reserves that we can still move forward on some projects and be all right,” Stoudt said.
Longview had factored in a 1% increase in total property values in the budget proposed to the City Council earlier this month. Part of Longview is in Harrison County.
City officials said the city’s total property valuations from both counties increased 2.22%, which will generate an additional $590,947 in revenue. That still would leave the city with a $184,000 deficit, down from $775,939, in the proposed budget.
Longview’s total property certified values, from Gregg and Harrison counties, are almost $6.21 billion, up from $6.1 billion in 2019, information from the city said.
“(The pandemic) has been hard on a lot of people,” Neely said, but property valuations are based on what’s happening Jan. 1, and there wasn’t a big effect on residential and commercial building values. Also, she said it’s been a good year for residential property sales and new home construction.
It’s hard to predict what next year will hold, Neely said, but she said businesses that are valued with an income approach — such as hotels or strip malls — could be among factors that affect next year’s property valuations.