The Big Oaks, Tex., Municipal Utility District may soon hold the record for the highest tax levy in the state because of falling property values.
Larry Williamson, vice president at the Llama Co. of Fayetteville, Ark., the district's financial adviser, said that a recent reassessment of property values in the district showed a decline last month to $972,000 from $1.5 million.
Because the district's defaulted $2.55 million in debt is backed by an unlimited tax pledge, advisers estimate the district would have to nearly double its tax levy to $58 per $100 of assessed valuation to meet debt service.
"This is probably the highest tax rate in the state," he said.
Before the state's real estate bust in the mid-1980s, the district had property values of nearly $9 million, or nine times the current taxable estimate.
The district may never actually raise the tax levy above the current level of $29 per $100 of assessed values if it receives permission from the Texas Water Development Board this month to file for Chapter 9 bankruptcy protection. The levy is already prohibitive to the kind of development the district needs to meet debt service.