Potter County is facing an unexpected reduction in property tax revenue this fiscal year following an appraisal error tied to the Potter-Randall Appraisal District’s software. County officials say the mistake will result in approximately $412,126 less in tax revenue for the 2025–2026 fiscal year, an amount equal to about one-half of one percent of the county’s overall tax revenue.
The issue stems from an overvaluation of Tyson Foods’ taxable property by roughly $70 million. According to county officials, the appraisal district failed to apply the company’s freeport exemption, a provision under Texas law that exempts certain goods from personal property taxation if they are stored in the state for 175 days or less and intended to be shipped out of Texas. Because the exemption was not applied, the taxable value used to calculate county revenue was higher than it should have been.
For context, the total appraised value in Potter County for the 2025–2026 fiscal year was approximately $15.65 billion. The portion of Tyson Foods’ property that should have been exempt represented about 0.4 percent of that total. While the percentage is relatively small, county leaders say the resulting revenue shortfall still matters because the county’s budget and tax rate were set using the incorrect figures.
Potter County’s overall budget for the fiscal year is about $95 million. Officials emphasize that the county does not need to return funds, as the taxes tied to the miscalculation were never actually collected. Instead, the county will simply receive less revenue than originally anticipated. The immediate impact will be absorbed through existing fund balances, but the error also has implications beyond the current fiscal year.
Because property tax rates in Texas are closely tied to prior-year revenue, the lower taxable value will affect future budget planning. Texas law allows taxing entities to adopt a no-new-revenue tax rate, which generates the same amount of revenue as the previous year, or to increase maintenance and operations revenue by up to 3.5 percent without voter approval. Any increase beyond that threshold requires an election. With the adjusted taxable base, Potter County may face tighter constraints when setting future tax rates and determining spending levels.
County officials say they were notified of the problem after the appraisal district identified the error internally. The chief appraiser contacted county leadership to explain what had occurred, allowing the county to adjust expectations before finalizing financial plans.
The situation also highlights broader concerns about tax competitiveness and taxpayer impact. Potter County’s current tax rate is about $0.59 per $100 of assessed value, noticeably higher than Randall County’s rate of just over $0.40 per $100. County leaders have expressed reluctance to rely on tax increases to address revenue gaps, citing the potential burden on residents.
Looking ahead to the 2026–2027 fiscal year, the corrected appraisal values will reduce the amount of taxable property compared to earlier projections. This will limit the revenue available for future budgets and require careful consideration of spending increases. County officials describe the situation as an example of how unforeseen errors can disrupt even carefully planned budgets, underscoring the need for cautious financial decision-making in the years ahead.
