Collin County is among the few government entities to publicly support a statewide proposal to cap local property tax increases, according to the Texas Association of Counties.
Collin County Judge Chris Hill said many cities and counties are mistaken in believing that a choice must be made between good services or a low tax rate. He believes they can have both with good financial planning. He cites Collin County as a prime example.
“If any government, city, county or otherwise wants to find out how we’ve done it, come and we’ll talk to you,” he said at the county’s Feb. 4 meeting. “Do not hide behind, ‘Our police and firemen will starve if you don’t let us raise your taxes by 8 percent every year.’ That is a farce, and the people have seen through it. They are tired of hearing it.”
Collin County commissioners unanimously passed a resolution on Feb. 4 in support of the revenue cap proposal filed Jan. 31 by Texas legislative leaders.
The proposal caps the increase in property tax revenues on existing properties at 2.5 percent. Cities, counties and school districts wanting to collect more than the 2.5 percent increase would be required to get voter approval. Under current law, voters may petition for an election if a taxing entity adopts a property tax rate that would increase revenue by more than 8 percent over the previous year.
Collin County commissioners said meaningful tax reform is directly tied to school finance reform. As part of its resolution, the county asked that the state substantially increase its investment in public education to reduce the burden on taxpayers.
“Collin County recognizes that, on average, two-thirds of the property tax bills of Collin County residents are collected by our local [school districts],” Hill said.
Gov. Greg Abbott commended Collin County’s resolution on Twitter.
“This is excellent,” Abbott said in the tweet. “Collin County takes a step toward ensuring property tax reform for their taxpayers. At the same time Texas will work to reduce Robin Hood, reform school finance, pay our teachers more, and reduce unfunded mandates on local government.”
While Collin County commissioners support the legislators’ proposed cap, some of the cities they represent are publicly against it. Those include Frisco and McKinney.
“It is not meaningful tax relief,” McKinney Mayor George Fuller told commissioners on Feb. 4. “Last year, had this revenue cap been in place, the average homeowner in McKinney would have saved $0.35 per month. Is that meaningful tax relief? No.”
On Feb. 6, the Texas Senate held a public hearing where counties, cities and residents voiced their opinions on property tax reform.
Based on 13 hours of testimony, many counties support pieces of the proposal, such as the creation of the property tax administrative advisory board, said Cary Roberts, media relations officer for the Texas Association of Counties.
However, at this time, more than three dozen commissioners’ courts have passed resolutions that express concerns about unfunded mandates that would be compounded by a 2.5 percent revenue cap, Roberts said.
“They have reservations about the impact that arbitrary revenue caps will have on providing essential government service, and they don’t lower property taxes,” Roberts said. “All [the bill] does is cap the tax rate. Revenue caps won’t reduce property taxes, [but] addressing school finance and the tax appraisal process will. A revenue cap is not a tax cut.”
Growing communities are hit particularly hard by the proposal, she said.
“Because property tax collections lag a year behind, local government tax incentives will disappear, which encourage economic development, [and] it will lead to greater local debt,” Roberts said. “The first things that will be cut will discretionary services, and that will include hospitals, parks, roads.”