For the 2008-09 fiscal year, Austin, Texas, property tax rate remains lower than other major cities across the state at $0.4012 per $100 property valuation. For the average homeowner, this means a tax bill of approximately $988 a year. 

The 2008-09 fiscal year tax rate of $0.4012 per $100 of property valuation is lower than last year's rate of $0.4034, but since home values are still climbing, the average homeowner will pay around $80 more a year to the city at tax time.

Tax rate decrease

With city-owned utilities making transfers to the general fund and substantial sales tax revenue, Austin is able to keep the property tax rate lower than other major cities in Texas. Ransom-Nelson said the average home price in Austin is up approximately $21,000 from last year to $246,352. Based on that valuation, a homeowner would pay $988.36 in property tax.

While the escalating property valuations will equal more tax revenue for the city this year, expenditures are increasing as the city tries to keep up with the growth. In a statement released during the budgeting process, Austin City Manager Marc Ott said the city will have to continue to keep a close eye on revenue in the coming years.

Growth is Slow But Steady

While the U.S. economy is experiencing turbulent times, the City of Austin projects that the local economy will continue to grow during the current fiscal year, but at a more moderate rate.

City economist John Ransom-Nelson said economic trends at the local level do not necessarily mimic those at the national level. "Because Austin is in a growth mode and expanding regionally, the city is less likely to experience the slowdown that is plaguing other areas," he said.

"It depends on where [a city is] situated when the economy does better or it does worse. Austin is building a bunch of apartment complexes, and the real estate market is still fairly strong at the time. It's eventually going to affect us, but not as much," he explained. New Home Builders are feeling a little pinch, as they continue discounting some inventory homes to attract buyers.

Austin Has a Slight Cushion

Austin is also made up of sectors less susceptible to economic slowdown. "You've got a state government here and a university that are, to some extent, recession proof," Ransom-Nelson said. "It doesn't mean that it's totally recession proof, but it's a large component of the makeup of Austin."

This "cushion" also helps the real estate markets in the surrounding communities like Round Rock, Pflugerville, Westlake, and the Lakeway/Lake Travis areas.