On May 7, 2022, Texas voters approved a constitutional amendment to Section 1-b, Article VIII, Subsection (d-2), reducing the limitation (freeze ceiling) amount based on the reduction in a school district’s Maintenance & Operations (M&O) rate due to any statutory M&O tax rate compression. The calculation of the statutory compression of the M&O rate will begin comparing the tier one 2018 M&O rate to 2019 compressed M&O rate. A year-to-year comparison will be made for 2019 to 2020, 2020 to 2021, 2021 to 2022 and 2022 to 2023, to calculate the total amount the limitation (freeze ceiling) is to be lowered.

This reduction in frozen taxes (limitation) is effective January 1, 2023, therefore the reduction will not be reflected in the 2022 tax bills, generally mailed by the Tax Assessor/Collector in October.

This is a multiple step calculation on each individual property that has a “frozen levy” We are working with our software vendor to make the appropriate changes by the January 1, 2023, effective date. The level of M&O tax rate compression will vary by school district, therefore the impact on frozen taxes will vary by school district. Additionally, for those beginning their tax freeze ceiling (limitation) after 2019 the calculation will be adjusted to calculate from their qualification year forward.

In brief, for those with frozen taxes at your school district, you will see your “frozen tax ceiling” reduced in 2023, if the school district’s M&O tax rate was compressed during the time frame listed above.

Tax Limitation (freeze ceiling) Effective Date: January 1, 2023