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Cost of Government Index

In May 2015, RECA released the Cost of Government Index for 2014. The 2014 numbers show that the median income for a family of four has only increased 3 percent while local taxes have increased by 5.5 percent. For the year 2014, an astonishing 9.7 percent of the average Austin family’s income went to local property taxes, sales taxes and utility transfers.

According to the index, the median family income rose from $73,200 in 2013 to just $75,200 in 2014. The combined cost of taxes paid to the City of Austin, Travis County, Austin Community College, Central Health and Capital Metro cost the average family $7,320.98 in 2014.

Read the RECA press release

View the Detailed Cost of Government Index (.xls)

BACKGROUND

In 1991, RECA created the annual Combined Cost of Government Index as a tool to track local tax trends and compare them to typical household income growth. We began with data dating back to 1989. The purpose was to shine a light on how much citizens are paying for governmental services in relation to their incomes. The index looks at the taxing rates of the Austin Community College, Austin Independent School District, Capital Metro, the City of Austin and Travis County. Some years later, the new hospital district, Central Health, was added to the index.

In addition to property tax, the index measures the impact of sales tax and utility transfers for the average household.

Since 1989, median income for a typical family of four increased 107.6 percent while the combined cost of taxes per household rose 243.7 percent. It is a 25-year trend that shows intermittent signs of slowing, but then picks up again.

These tax rates are set after each authority examines the needs of operating budgets and debt payment in relation to the total taxable value of properties located in the taxing unit’s jurisdiction.

During the budgetary process, taxing authorities conduct public hearings between August and September, which include discussions regarding setting the upcoming fiscal property tax rate.

Citizens interested in how much they pay in property taxes can participate in the annual public hearing when each taxing jurisdiction sets the tax rate.These hearings typically take place in July and August each year.

How is the tax determined?

  • Formula : Value X Rate = Tax
  • Taxable value of your property times the tax rate for each jurisdiction = the property tax you must pay on the real estate property you own