Nueces County Wins Budget clarity after local entities—including Del Mar College, CCISD, and Tuloso-Midway ISD—faced major shortfalls two years ago. These challenges stemmed not from poor management or an economic downturn, but from an obscure flaw in Texas property tax law.
The issue’s core was how Texas required local governments to set their property tax rates. Taxing entities must base their budgets on property valuations the county appraisal district issued. However, property owners can contest these values, and if large taxpayers challenge and win, they may cause actual tax revenue to fall far short of projections.
The 2023 Property Valuation Dispute
For the 2023 tax year, the Nueces County Appraisal District raised property values substantially. Two of the county’s largest taxpayers, Valero and Flint Hills Resources, disputed the increased valuations. Initially, both were assigned valuations exceeding $6 billion. However, they countered with much lower figures—$1.4 billion and $1.1 billion, respectively—leaving billions in value contested.
This situation forced local governments into a budgeting nightmare. Although officials knew they wouldn’t collect the full projected revenues, the law still required them to budget as if they would. As a result, departments faced multimillion-dollar uncertainties.
Legislative Action: A Long Time Coming
Because the Texas Legislature only meets every two years, the problem surfaced too late in 2023 for lawmakers to act during the regular session. Although Sen. Juan “Chuy” Hinojosa attempted to introduce a solution during a special session, it fell outside the session’s scope.
However, persistence paid off. In 2024, Sen. Hinojosa and Rep. Denise Villalobos introduced House Bill 3093, a targeted reform bill. The Texas House and Senate passed it and sent it to Governor Greg Abbott for final approval.
Key Provisions of House Bill 3093
The new bill requires large taxpayers in certain coastal counties to declare an uncontested taxable value while pending litigation. Local governments can then base their no-new-revenue or voter-approved tax rates on these declared values—avoiding unrealistic budget expectations.
Significantly, the bill doesn’t impact taxpayers’ rights to contest valuations or the outcome of litigation. It simply ensures that local governments can plan more effectively in the meantime.
Local Voices: Support and Relief
Rep. Villalobos, a freshman lawmaker with firsthand experience on the Tuloso-Midway ISD board, described the previous budgeting constraints as “havoc.” The school district had funds it couldn’t use, fearing they would need to return them after litigation.
Del Mar College President Mark Escamilla also voiced strong support. He testified that the college faced a potential $4 million shortfall, threatening educational programs and employee compensation. The college initially excluded staff raises from the 2024 budget. However, after actual revenues exceeded expectations—thanks in part to a settlement with Flint Hills—Del Mar issued one-time stipends using reserve funds.
Nueces County Judge Connie Scott echoed those concerns. She took office in 2023 and was immediately confronted with a budget crisis. With a potential $30 million shortfall, Nueces County shifted into “survival mode,” enforcing 10% cuts across all departments and freezing open positions. Thanks to recent legislative reforms, Nueces County wins budget stability, allowing local leaders to plan more effectively and avoid the chaos of the past.
Impact and Outlook
Ultimately, Del Mar College collected 2.09% more in property tax revenues than initially projected. Nueces County saw its deficit reduced to $7–$8 million, down from the feared $30 million. These improvements came too late to avoid drastic short-term cuts, but they highlighted the urgency for reform.
Tax Assessor/Collector Kevin Kieschnick helped draft the bill, working closely with Hinojosa. He believes lawmakers should expand the policy statewide to benefit all counties facing similar challenges.
Who the Bill Affects
House Bill 3093 applies only to coastal Texas counties on the Gulf of Mexico with populations under 500,000. It targets disputes involving the top 20 highest-value properties in the county and won’t affect everyday homeowners or small business owners.
For major property owners like Valero and Flint Hills, the bill preserves all legal rights to appeal valuations while helping communities avoid chaotic budgeting cycles.
Conclusion: A Win for Local Governments
With the passing of HB 3093, Nueces County and similar coastal communities can finally breathe a little easier. The new law marks a significant step in balancing taxpayer rights with government stability by allowing more realistic budget planning during tax disputes.