Under revenue cap, Houston City Council approves tax rate reduction

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Houston City Council approved a $0.02 reduction in the city’s property tax rate Sept. 11.

Council members approved the proposed rate of $0.5679 per $100 valuation, which is a reduction from the 2018 rate of $0.5883 per $100 valuation, effectively a 3.47% rate decrease.

Houston’s voter-approved revenue cap, which has been in place since 2004, limits property tax revenue growth to 4.5% or a calculation that factors in inflation and population growth, whichever is less. The 2019 cap was calculated to be 2.94%, city officials said.

The median single-family home value in 2018 was $245,000, according to City of Houston Financial data. Based on that value, a homeowner’s property tax bill would drop by about $50 if the appraised value stayed the same in 2019. However, if the property’s value increased between 2018 and 2019, the homeowner would see little to no tax reduction.

City council has approved a lower tax rate every year since 2014, spurring a discussion among council members about the benefits and drawbacks of Houston’s belt-tightening.

Council Members Jack Christie, Mike Knox, Dave Martin and Mike Knox praised the revenue cap as necessary means to prioritize city spending.

“[The revenue cap] keeps us from spending beyond our means,” Travis said. “Because otherwise we’ll have a bloated bureaucracy.”

Vice Mayor Pro Tem and District B Council Member Jerry Davis said the revenue cap unnecessarily limits spending on essential city services.

“When I go back to my district, My heart hurts knowing I have three months left and I haven’t fixed all the things I promised to fix,” Davis said.

The two dissenting votes came from Mayor Pro Tem and District C Council Member Ellen Cohen and District D Council Member and mayoral candidate Dwight Boykins. Boykins said he could not approve a budget that would deny the city an estimated $43 million in property tax revenue while facing inadequate support from the state and federal government.

“I think we need to reconsider thinking about this idea of local government wasting money. We have to provide services. I don’t know if it’s a buzzword to be conservative about services, but trash pickup trucks are being broken down and police cars,” he said. “The fire trucks are leaking water.”

When asked about the legal implications of not passing a tax rate, City Attorney Ron Lewis said city code would require the rate be set at either the previous year’s rate or the effective tax rate, whichever rate is lower. In this case, the city would have defaulted to the effective tax rate of $0.5879 per $100 valuation, which would violate the city’s 4.5% revenue revenue growth limit and potentially trigger legal action.

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Emma Whalen
Emma is Community Impact Newspaper's Houston City Hall reporter. Previously, she covered health care and public education in Austin.
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