This year, island owners filed protests over about 60 percent of proposed valuations for the next tax year, officials said, an indication of growing unrest over soaring values driven by a hot real-estate market.

The city’s finance department gave funding projections to city council at a Thursday morning workshop, warning of the impending funding problems City Manager Brian Maxwell called unsustainable, noting a ballooning public safety budget that consumes a vast majority of the general fund.

That could be further compounded by stagnant sales tax numbers this year compared to last, according to data presented by city staff.

The city’s most recent appraisal, which rose about 2 percent from last year because of new construction, totaled about $339 million before considering about $86 million in already approved protests; that took the city’s total value to about $252 million, according to data from the appraisal district.

That $86 million slashed from the pool of taxable value could equate to about $382,000 in lost ad valorem tax revenue going into the city’s $59.8 million general fund budget for the coming fiscal year.

The fund pays for public safety, about $45.2 million; infrastructure, about $6 million; streets and traffic, about $4.7 million; and parks, about $3.9 million. None of the projections include requests from city departments, Csilla Ludanyi, executive director of finance planning and budgeting, said.

City staff initially projected a $250 million loss in taxable value, but noted the numbers were preliminary and subject to change.

And the number did change only a few hours later.

City staff members amended the projected loss to about $160 million Thursday after Galveston County Chief Appraiser Krystal McKinney disputed the initial estimate. A loss of that much would cut projected revenue about $700,000.

The Galveston Appraisal District each year assesses thousands of properties in the county to determine their market value, which determines how much property owners will owe to various taxing jurisdictions, such as cities and school districts.

Owners can protest the appraised values and frequently can convince an appraisal review board to reduce the new taxable value.

The number at issue in Galveston is the total value of taxable property in the city’s jurisdiction. That base number, multiplied by the city’s tax rate — which is about 44.5 cents for every $100 of taxable value — determines how much property tax revenue the city can expect to collect during the next fiscal year.

The higher the base value, the more revenue. Ad valorem property tax revenue should reach about $33.9 million for the year, according to the city staff report.

The number that city staff gave council probably overstated the losses, but will be more than $86 million, which accounts only for protests resolved by mid-May, Mike Loftin, chief financial officer, said.

That number excludes 91 protested properties, which could slash another $80 million from total appraised value, Loftin said.

Many property owners see the appraisal system as unfair, including Tom Schwenk, who earned his real estate license in 2003 and has become one of the island’s best-known Realtors.

“It sometimes seems that the appraisal district pulls things out of thin air,” Schwenk said. “If they keep it under the radar, people won’t fight them. This year, it just seems so egregious. I think the squeaky wheel gets the grease, so I advise everyone to protest their taxes every year.”

“I think they throw things up in the air and if it only falls halfway down, it’s OK,” he said.

Schwenk owns a midtown property that was valued at about $94,000 in 2021, he said. This year, the appraised value jumped to about $209,000, a 123 percent increase. That means the tax bill rose from about $2,300 to more than $4,400, an increase of more than 90 percent.

“Who knows why,” Schwenk said. “It’s completely convoluted. And there’s been nothing done to the house. It has not increased in value. If anything, it’s lost value.”

He had the home gutted in Ike’s wake, leaving the interior studs bare for the past decade, Schwenk said. The appraisal district still valued the property at more than double its previous amount.

Another two-bedroom rental property Schwenk owns was valued at about $155,000 in 2019, about $323,000 in 2022 and $477,000 this year, an increase of more than 200 percent over four years, he said.

“I’m a Realtor, I couldn’t get $477,000 for that house,” Schwenk said.

Property owners should always fight their appraisals, Schwenk said. It helps to make an appointment with the district and go in person to meet; it’s also of tremendous benefit to the owner to include their real estate agent on the protest, he said.

“A lot of people will protest, and a lot of people will win,” Schwenk said.