Here's how Texas' proposed spending cap on cities would affect move to limit property taxes

One of Gov. Greg Abbott's special session charges is taking aim at the spending habits of the state's cities and counties.

The bill, which Abbott said would limit the growth in local spending to population growth and inflation, will be filed by Sen. Craig Estes, R-Wichita Falls, and Rep. Jason Villalba, R-Dallas.

Ashley Juergens, Villalba's chief of staff,  said the bill will also include a provision that allows cities to spend outside this limitation only with approval from voters through an election.

Juergens said Villalba is not sure what the election provision will look like, as the bill is still in the draft phase, but it will allow cities some leeway in times of economic hardship.

Juergens gave examples of the pension problem in Dallas or natural disasters in East Texas as reasons why cities might tap into this election proviso.

This bill will address the flip side of an issue from the regular session—the unchecked growth of property taxes. In the regular session, Senate Bill 2 sought to limit the growth of the rollback tax rate by capping it at 4 percent. If an entity set a tax rate above that number, an election would be automatically triggered.

Throughout the session, a number of changes were made to the bill, including upping the acceptable cap to 5 percent, and then in the House, removing the cap altogether in lieu of increased transparency.

SB 2 initially sought to address the revenue side of property taxes by limiting how much money could be taken in. The proposed local spending cap looks at the opposite side of the equation—the spending of that revenue. If spending is limited to just growth plus inflation, by default, revenue could also be restricted.

Villalba said his constituents in Dallas have been asking for this kind of relief.

"The bill I will be filing during the special session will rein in irresponsible spending by local elected officials and grant the taxpayers with the ultimate authority to make the final call on government growth that exceeds that of growth plus inflation," he said in statement. "If we can get our spending under control, then we can lower property taxes, which most everyone in Dallas is asking for."

The Texas Municipal League, an organization representing the interests of cities, called Abbott's special session charges a "recipe for disaster."

"From proposed revenue caps, to spending caps, to tree ordinances, to texting while driving and more, no one has ever proposed such sweeping restrictions on local voters having a voice in shaping the character of their communities," a TML statement said.

Before lawmakers can address this spending cap, however, they must pass essential sunset legislation that would extend the life of a number of Texas agencies, including the Texas Medical Board, which licenses doctors throughout the state.

Following the passage of this legislation, Abbott has promised to add another 19 items to the special session call, including this local spending cap.


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